FRS Investment Plan Summary - Lake County
FRS Investment Plan Summary - Lake County
FRS Investment Plan Summary - Lake County
Create successful ePaper yourself
Turn your PDF publications into a flip-book with our unique Google optimized e-Paper software.
July 1, 2009
TABLE OF CONTENTS<br />
DISCLAIMER ..........................................................................................................................................3<br />
INTRODUCTION.....................................................................................................................................4<br />
THE <strong>FRS</strong> INVESTMENT PLAN ..............................................................................................................4<br />
What is the <strong>FRS</strong> <strong>Investment</strong> <strong>Plan</strong>...........................................................................................4<br />
How is the <strong>FRS</strong> <strong>Investment</strong> <strong>Plan</strong> administered ....................................................................5<br />
What are the requirements for <strong>FRS</strong> membership and voluntary participation in the <strong>FRS</strong><br />
<strong>Investment</strong> <strong>Plan</strong>.......................................................................................................................6<br />
What are the eligibility requirements for participation in the <strong>FRS</strong> <strong>Investment</strong> <strong>Plan</strong>.........7<br />
When am I vested in the <strong>FRS</strong> <strong>Investment</strong> <strong>Plan</strong> and what is normal retirement age .........7<br />
As a new employee, how do I enroll in the <strong>FRS</strong> <strong>Investment</strong> <strong>Plan</strong>.......................................9<br />
HOW THE <strong>FRS</strong> INVESTMENT PLAN OPERATES..............................................................................10<br />
What are the <strong>FRS</strong> membership classifications...................................................................10<br />
How are contributions made to my account in the <strong>FRS</strong> <strong>Investment</strong> <strong>Plan</strong> .......................11<br />
How will the present value of my Pension <strong>Plan</strong> retirement benefit be determined ........11<br />
What investment options are available in the <strong>FRS</strong> <strong>Investment</strong> <strong>Plan</strong>................................13<br />
How can I change my investment options in the <strong>FRS</strong> <strong>Investment</strong> <strong>Plan</strong>...........................13<br />
What is the Excessive Fund Trading Policy .......................................................................13<br />
What is my creditable service ..............................................................................................17<br />
What are the various types of employment status.............................................................17<br />
Can I return to employment after I retire .............................................................................18<br />
How can I make a beneficiary designation .........................................................................23<br />
What are my rights to a benefit ............................................................................................23<br />
How do I update my mailing address or change my name in my <strong>FRS</strong> records...............24<br />
DISTRIBUTIONS FROM THE <strong>FRS</strong> INVESTMENT PLAN....................................................................25<br />
How can I take distributions from the <strong>FRS</strong> <strong>Investment</strong> <strong>Plan</strong>.............................................25<br />
What taxes are payable on distributions.............................................................................27<br />
What charges are assessed on accounts in the <strong>FRS</strong> <strong>Investment</strong> <strong>Plan</strong>............................27<br />
THE SECOND ELECTION....................................................................................................................28<br />
If I want to use my second election to change from to the <strong>FRS</strong> <strong>Investment</strong> <strong>Plan</strong> to the<br />
<strong>FRS</strong> Pension <strong>Plan</strong>, how will the buy-in amount be determined ........................................30<br />
BENEFITS.............................................................................................................................................32<br />
Disability benefits....................................................................................................................32<br />
Death benefits..........................................................................................................................33<br />
Health Insurance Subsidy (HIS) .............................................................................................33<br />
Insurance coverage after retirement......................................................................................34<br />
Do I forfeit my retirement benefits if I commit a crime ......................................................34<br />
COMPLAINT PROCEDURES...............................................................................................................36<br />
OTHER <strong>FRS</strong> INVESTMENT PLAN INFORMATION ............................................................................36<br />
Can I cancel a retirement plan election once it has been made .......................................36<br />
Situations which may affect your <strong>FRS</strong> <strong>Investment</strong> <strong>Plan</strong> benefits .......................................37<br />
What is the process for amendments to the plan or for termination of the plan ............37<br />
What is the policy regarding errors and incorrect or incomplete data ............................38<br />
What are my rights regarding employment in the <strong>FRS</strong> <strong>Investment</strong> <strong>Plan</strong> .........................38<br />
What are my rights to assign benefits.................................................................................38<br />
<strong>Investment</strong> <strong>Plan</strong> member records and public records law exemption ...............................39<br />
RETIREMENT PLAN ROLL OVERS TO THE INVESTMENT PLAN...................................................40<br />
RETIREMENT AND FINANCIAL PLANNING ......................................................................................41<br />
WHERE SHOULD I GO FOR MORE INFORMATION .......................................................................41<br />
WHAT IS THE FINANCIAL GUIDANCE AND ADVICE POLICY.......................................................42<br />
GLOSSARY ..........................................................................................................................................44<br />
INDEX ...................................................................................................................................................47
DISCLAIMER<br />
This summary plan description is a summary written in nontechnical terms of the main provisions of<br />
the Public Employee Optional Retirement Program (also known as the Florida Retirement System<br />
<strong>Investment</strong> <strong>Plan</strong>). It is not intended to include every program detail. Complete details can be found in<br />
Chapter 121, Florida Statutes, and the rules of the State Board of Administration of Florida (SBA) in<br />
Title 19, Florida Administrative Code (F.A.C.). In case of any conflict between this summary plan<br />
description and the statutes and rules, the provisions of the statutes and rules will control.<br />
The information provided in this brochure is based on the Florida Retirement System (<strong>FRS</strong>) laws and<br />
rules in existence on July 1, 2009, and is subject to modification based on changes in the law in<br />
Chapter 121, Florida Statutes, or the rules as found in Rule Titles 19 and 60 of the F.A.C.<br />
Although participating <strong>FRS</strong> employers have certain obligations under Section 121.4501(10)(h), Florida<br />
Statutes, and Section 19-13.003(2)(a), F.A.C., to regularly communicate the existence of both the <strong>FRS</strong><br />
Pension <strong>Plan</strong> and <strong>FRS</strong> <strong>Investment</strong> <strong>Plan</strong>, as well as the plan choice available to employees under the<br />
<strong>FRS</strong>, they are not agents of the SBA or the <strong>FRS</strong> (per Section 19-13.003(3), F.A.C.). You may obtain<br />
information on the <strong>FRS</strong> from a participating employer; however, the SBA is not responsible for<br />
erroneous information provided by representatives of these participating employers.<br />
As a member of the <strong>FRS</strong> you have an obligation to understand the plan provisions which<br />
govern your membership and should comply with these provisions in your actions. You also<br />
have an obligation to use the free resources available to you through the <strong>FRS</strong> to help you<br />
manage your retirement account. You should also know that THE <strong>FRS</strong> MAY REVERSE<br />
RETIREMENT PLAN ELECTIONS OR TRANSACTIONS THAT ARE INCONSISTENT WITH<br />
FLORIDA STATUTES AT ANY TIME, WITHOUT LIMITATION OR PRIOR NOTICE TO YOU.<br />
3<br />
The My<strong>FRS</strong> Financial Guidance Program — Use It No Matter Which <strong>Plan</strong> You Choose<br />
Phone: My<strong>FRS</strong> Financial Guidance Line: 1-866-446-9377 (TTY: 1-888-429-2160) •<br />
Online: My<strong>FRS</strong>.com • Retirement and Financial <strong>Plan</strong>ning Workshops offered in some locations
INTRODUCTION<br />
Financial security when you retire is an important goal, and one that the Florida Retirement System<br />
(<strong>FRS</strong>) can help you achieve. The <strong>FRS</strong> has two retirement plans from which eligible employees can<br />
choose to help them meet their retirement goals: the <strong>FRS</strong> Pension <strong>Plan</strong> (defined benefit) and the <strong>FRS</strong><br />
<strong>Investment</strong> <strong>Plan</strong> (defined contribution). Your employer makes all contributions to the plan you choose.<br />
Each <strong>FRS</strong> plan is designed to provide you with a good foundation for financial security when<br />
considered along with Social Security, other retirement programs, and your own personal savings<br />
(including savings accounts, IRAs, and deferred compensation programs offered through your<br />
employer, among other resources).<br />
This document is a description of one of these plans: the <strong>FRS</strong> <strong>Investment</strong> <strong>Plan</strong>.<br />
The <strong>FRS</strong> also offers free retirement planning support through the My<strong>FRS</strong> Financial Guidance<br />
Program, which can help all <strong>FRS</strong> members better prepare for their retirement. Contact information is<br />
available at the bottom of each page.<br />
THE <strong>FRS</strong> INVESTMENT PLAN<br />
What is the <strong>FRS</strong> <strong>Investment</strong> <strong>Plan</strong><br />
The <strong>FRS</strong> <strong>Investment</strong> <strong>Plan</strong> is a defined contribution retirement plan qualified under Section 401(a) of<br />
the Internal Revenue Code. This means that employer contributions are made to each member’s<br />
account under the plan. These employer contributions are set by state law based on retirement<br />
membership class, as described below. The term “defined contribution” for the <strong>FRS</strong> <strong>Investment</strong> <strong>Plan</strong><br />
means that employer contributions are defined; in the <strong>FRS</strong> Pension <strong>Plan</strong>, the benefit is defined. Your<br />
employer’s contributions are deposited in an account established for you under the <strong>FRS</strong> <strong>Investment</strong><br />
<strong>Plan</strong>. Benefits are based on the total value of your account at distribution. This amount is based on<br />
employer contributions, plus interest and earnings on those contributions, less fees and plan charges.<br />
The Florida Legislature enacted this optional retirement plan during the 2000 legislative session. Its<br />
formal name, as set out in Part II of Chapter 121, Florida Statutes, is the “Public Employee Optional<br />
Retirement Program.” However, in order to provide a strong contrast with the existing retirement plan,<br />
the defined benefit plan, the State Board of Administration of Florida (SBA), which is responsible for<br />
establishing and administering the program, calls the defined benefit program the <strong>FRS</strong> Pension <strong>Plan</strong><br />
and calls the defined contribution program the <strong>FRS</strong> <strong>Investment</strong> <strong>Plan</strong>. This document will use the term<br />
<strong>FRS</strong> <strong>Investment</strong> <strong>Plan</strong>.<br />
Since the <strong>FRS</strong> <strong>Investment</strong> <strong>Plan</strong> is a governmental plan, the plan documents are the Florida Statutes<br />
enacting this plan, which may be found and reviewed through the My<strong>FRS</strong>.com web site. All Florida<br />
Statutes are subject to amendment or deletion each year during Florida’s legislative sessions.<br />
Consequently, all statements in this <strong>Summary</strong> <strong>Plan</strong> Description are subject to legislative change.<br />
Where there are discrepancies between the Florida Statutes and this document, the Florida Statutes<br />
control. Similarly, all rules adopted by the SBA to implement this plan must conform to the Florida<br />
4<br />
The My<strong>FRS</strong> Financial Guidance Program — Use It No Matter Which <strong>Plan</strong> You Choose<br />
Phone: My<strong>FRS</strong> Financial Guidance Line: 1-866-446-9377 (TTY: 1-888-429-2160) •<br />
Online: My<strong>FRS</strong>.com • Retirement and Financial <strong>Plan</strong>ning Workshops offered in some locations
Statutes. But if the Florida Legislature changes the statute, a rule might no longer conform. In that<br />
circumstance, the SBA is required to amend the rule so that it conforms to the statute.<br />
Therefore, the controlling policies and procedures for the <strong>FRS</strong> <strong>Investment</strong> <strong>Plan</strong> are the Florida<br />
Statutes and any rules which properly implement those statutes.<br />
Reference:<br />
Sections 121.4501(1), (2)(i), and (8), F.S.<br />
Sections 19-12.001, 12.002, 13.001, and 13.003, F.A.C.<br />
How is the <strong>FRS</strong> <strong>Investment</strong> <strong>Plan</strong> administered<br />
The SBA, along with its contractual partners and participating <strong>FRS</strong> employers, and with the assistance<br />
of the Division of Retirement within the Florida Department of Management Services, is required by<br />
statute to implement and administer the <strong>FRS</strong> <strong>Investment</strong> <strong>Plan</strong>.<br />
Official <strong>Plan</strong> Name: Florida Retirement System Public Employee Optional Retirement<br />
Program.<br />
Common <strong>Plan</strong> Name: <strong>FRS</strong> <strong>Investment</strong> <strong>Plan</strong><br />
Type of <strong>Plan</strong>: Defined Contribution Retirement <strong>Plan</strong> qualified under Section 401(a) of the<br />
Internal Revenue Code.<br />
Federal Employer Identification Number: 59-6001872<br />
<strong>Plan</strong> Number: 002<br />
<strong>Plan</strong> Sponsor: State Board of Administration of Florida (SBA). The SBA is charged with<br />
establishing and administering this plan.<br />
<strong>Plan</strong> Trustees: Executive Director, State Board of Administration of Florida, representing the<br />
Governor, the Chief Financial Officer and the Attorney General as the Trustees of the Board.<br />
The address for the Executive Director is: Executive Director, State Board of Administration of<br />
Florida, 1801 Hermitage Blvd., Suite 100, Tallahassee, Florida 32308. The address for each of<br />
the three Trustees of the Board is: The Capitol, Tallahassee, Florida 32399.<br />
<strong>Plan</strong> Documents are the Florida Statutes and the rules of the State Board of<br />
Administration establishing the <strong>Plan</strong>: Chapter 121, Parts I, II, and III, Rule Title 19, Florida<br />
Administrative Code.<br />
<strong>Plan</strong> Year: July 1 through June 30.<br />
Source of Benefit Payments: All benefits payable under the <strong>Investment</strong> <strong>Plan</strong> shall be paid<br />
solely from your individual retirement account within the Public Employee Optional Retirement<br />
Program Trust Fund.<br />
Agent for Service of Legal Process: Executive Director, State Board of Administration of<br />
Florida, 1801 Hermitage Blvd., Suite 100, Tallahassee, Florida 32308.<br />
Name of <strong>Plan</strong> Administrator: ING 1 , <strong>FRS</strong> <strong>Investment</strong> <strong>Plan</strong> Administrator, P.O. Box 56290,<br />
Jacksonville, Florida 32241-6290; telephone: 1-866-446-9377, Option 4. This is a toll-free<br />
number.<br />
Date plan effective: The plan became effective July 1, 2000, although the first members in<br />
the plan were effective July 1, 2002.<br />
Name of Employer: Your <strong>FRS</strong> employing agency<br />
As a state governmental plan, the Employee Retirement Income Security Act of 1974 (ERISA) does<br />
not apply except to the extent certain sections of that federal law are incorporated into Florida law.<br />
Section 121.4501(15), Florida Statutes, incorporates the federal law concept of fiduciary responsibility<br />
1 Note: Effective January 1, 2010, Hewitt Associates will replace ING as the <strong>FRS</strong> <strong>Investment</strong> <strong>Plan</strong> Administrator.<br />
5<br />
The My<strong>FRS</strong> Financial Guidance Program — Use It No Matter Which <strong>Plan</strong> You Choose<br />
Phone: My<strong>FRS</strong> Financial Guidance Line: 1-866-446-9377 (TTY: 1-888-429-2160) •<br />
Online: My<strong>FRS</strong>.com • Retirement and Financial <strong>Plan</strong>ning Workshops offered in some locations
on the part of the Trustees of the SBA, codified at 29 U.S.C. 1104(a)(1)(A)-(C), and also incorporates<br />
the federal law concept of participant control, established by regulations of the U.S. Department of<br />
Labor under Section 404(c) of ERISA.<br />
Under the concept of fiduciary responsibility, the Trustees of the SBA shall ensure that investment of<br />
<strong>FRS</strong> <strong>Investment</strong> <strong>Plan</strong> assets shall be made for the sole interest and exclusive purpose of providing<br />
benefits to plan participants and beneficiaries and defraying reasonable expenses of administering the<br />
plan.<br />
Under the concept of participant control, if you, as a participant, exercise control over your assets in<br />
the <strong>FRS</strong> <strong>Investment</strong> <strong>Plan</strong>, pursuant to Section 404(c) regulations and all applicable laws governing the<br />
operation of the <strong>FRS</strong> <strong>Investment</strong> <strong>Plan</strong>, no program fiduciary shall be liable for any loss to your account<br />
that may result from your exercise of that control.<br />
The SBA has the responsibility to vote proxies on all investment funds in the <strong>FRS</strong> <strong>Investment</strong> <strong>Plan</strong> and<br />
has a fiduciary responsibility to ensure proxies are voted in the best interest of fund participants and<br />
beneficiaries. For open-end mutual funds offered within the <strong>FRS</strong> <strong>Investment</strong> <strong>Plan</strong>, the SBA’s voting<br />
responsibility is limited to directly voting the fund’s proxy, which covers the mutual fund’s Board of<br />
Trustees and other major fund policies, but does not encompass voting the underlying stock<br />
investments of the fund’s portfolio. For all other fund’s offered within the <strong>FRS</strong> <strong>Investment</strong> <strong>Plan</strong> that<br />
hold publicly traded equity securities, the SBA is responsible for all proxy voting decisions. For more<br />
information, please see the “Corporate Governance” section located on the SBA’s Internet site,<br />
www.sbafla.com.<br />
Reference:<br />
Sections 121.4501(1), (8)(b)4., and (15)(b)-(c), F.S.<br />
Sections 19-11.006(4)(c)5.f., 11.007(4)(d)5.c., 12.001, 12.002, 12.005, 13.001, 13.003,<br />
and 13.004, F.A.C.<br />
What are the requirements for <strong>FRS</strong> membership and voluntary participation in the <strong>FRS</strong><br />
<strong>Investment</strong> <strong>Plan</strong><br />
Membership in the <strong>FRS</strong> is required for all full-time and part-time employees working in a regularly<br />
established position for a state agency, county government, district school board, state university,<br />
community college, or participating city, special district, charter school, or metropolitan planning<br />
organization. Elected officials may elect not to participate in the <strong>FRS</strong> retirement program. And<br />
employees of the Elected Officers’ Class (EOC) may elect to participate in the Senior Management<br />
Service Class in lieu of the Elected Officers’ Class. The following employees may elect to participate<br />
in other annuity or optional programs instead of the <strong>FRS</strong> <strong>Investment</strong> <strong>Plan</strong>:<br />
<br />
<br />
<br />
Senior Management Service Class employees (including Elected Officers’ Class employees who<br />
choose to join that class);<br />
State University System faculty and administrative and professional employees; and<br />
State Community College System faculty and certain administrators, if their college offers an<br />
optional retirement program.<br />
If an employee works in two or more jobs at the same time that are covered by different <strong>FRS</strong><br />
membership classes, the employee may be a member of only one class, which will be determined as<br />
follows:<br />
6<br />
The My<strong>FRS</strong> Financial Guidance Program — Use It No Matter Which <strong>Plan</strong> You Choose<br />
Phone: My<strong>FRS</strong> Financial Guidance Line: 1-866-446-9377 (TTY: 1-888-429-2160) •<br />
Online: My<strong>FRS</strong>.com • Retirement and Financial <strong>Plan</strong>ning Workshops offered in some locations
If the jobs are covered by different membership classes, and none of which is the Elected Officers’<br />
Class, the member will be in the class in which he or she is employed for more than half the time.<br />
When the employment is split equally, the member may choose the class of membership he or she<br />
prefers.<br />
If the jobs are covered by different <strong>FRS</strong> membership classes, and one of which is the EOC, the<br />
member may choose to participate in any one class for which he or she is eligible.<br />
If the member is required or chooses to be a member of the Regular Class, his or her total salaries<br />
from all positions will be reported for retirement purposes. When the member is required or chooses<br />
to be a member of the Special Risk Class, the Special Risk Administrative Support Class, the Senior<br />
Management Service Class, or the Elected Officers’ Class, only salary from that position will be<br />
reported for retirement purposes.<br />
Reference:<br />
Sections 121.4501(2)(f) and (h), (3), and (4), and 121.051(9), F.S.<br />
Sections 19-11.006 and 11.007, F.A.C.<br />
What are the eligibility requirements for participation in the <strong>FRS</strong> <strong>Investment</strong> <strong>Plan</strong><br />
As an <strong>FRS</strong> member, you are eligible to participate in the <strong>FRS</strong> <strong>Investment</strong> <strong>Plan</strong> unless you are a<br />
participant in one of the following programs:<br />
Deferred Retirement Option Program (DROP), except that terminated DROP participants may roll<br />
over their DROP proceeds into the <strong>Investment</strong> <strong>Plan</strong> as described in this document;<br />
Mandatory State University System Optional Retirement Program (SUSORP) participant. Faculty,<br />
including clinical faculty, in a college at a state university that has a faculty practice plan are<br />
mandatory participants of the SUSORP;<br />
Teachers’ Retirement System (TRS);<br />
State and <strong>County</strong> Officers’ and Employees’ Retirement System (SCOERS); or<br />
A retiree of the <strong>FRS</strong> Pension <strong>Plan</strong>, <strong>FRS</strong> <strong>Investment</strong> <strong>Plan</strong>, or any state-administered retirement<br />
system who is initially reemployed with an <strong>FRS</strong>-covered employer on or after July 1, 2010.<br />
If you choose to participate in the <strong>FRS</strong> <strong>Investment</strong> <strong>Plan</strong>, your employer will contribute an amount to<br />
your account every month equal to a percentage of your gross salary for the calendar month (for<br />
example, 9% of gross salary for Regular Class employees; see description of membership classes,<br />
below). You direct the investment of your account among the investment funds available through the<br />
<strong>Plan</strong>.<br />
Please understand that these eligibility requirements are established by the Florida Legislature and<br />
codified in the Florida Statutes. They are subject to change.<br />
Reference:<br />
Sections 121.4501(2)(f), (3), and (4), F.S.<br />
Sections 19-11.006 and 11.007, F.A.C.<br />
When am I vested in the <strong>FRS</strong> <strong>Investment</strong> <strong>Plan</strong> and what is normal retirement age<br />
For the <strong>FRS</strong> <strong>Investment</strong> <strong>Plan</strong>, if you have completed one year of service with an <strong>FRS</strong> employer, you<br />
are vested in (or, you “own”) all contributions and earnings on those contributions. For the <strong>FRS</strong><br />
<strong>Investment</strong> <strong>Plan</strong>, there is no “normal retirement age.” After you have terminated all <strong>FRS</strong>-covered<br />
employment for 3 calendar months, you can take the value of your account with you, regardless of<br />
7<br />
The My<strong>FRS</strong> Financial Guidance Program — Use It No Matter Which <strong>Plan</strong> You Choose<br />
Phone: My<strong>FRS</strong> Financial Guidance Line: 1-866-446-9377 (TTY: 1-888-429-2160) •<br />
Online: My<strong>FRS</strong>.com • Retirement and Financial <strong>Plan</strong>ning Workshops offered in some locations
your age. See “Distributions from the <strong>FRS</strong> <strong>Investment</strong> <strong>Plan</strong>” for further information on the distribution<br />
requirements.<br />
This is in contrast with the <strong>FRS</strong> Pension <strong>Plan</strong>. In the <strong>FRS</strong> Pension <strong>Plan</strong>, you need six years of service<br />
to vest. Further, normal retirement age for Regular Class employees in the <strong>FRS</strong> Pension <strong>Plan</strong> is the<br />
earlier of age 62 or attaining 30 years of service. If you have previous <strong>FRS</strong> Pension <strong>Plan</strong> service that<br />
you may transfer to the <strong>FRS</strong> <strong>Investment</strong> <strong>Plan</strong>, that service will vest under the <strong>FRS</strong> Pension <strong>Plan</strong>’s 6-<br />
year vesting schedule.<br />
If you leave <strong>FRS</strong>-covered employment before you’re vested in your <strong>Investment</strong> <strong>Plan</strong> benefit, you won’t<br />
be entitled to any benefit. Your account balance will be placed in a suspense account, where it will<br />
accrue actual investment earnings. If you return to work for an <strong>FRS</strong> employer within 5 years of your<br />
termination date, your account balance plus any earnings will be returned to you and combined with<br />
any future service credit and applied toward vesting of your account. If you never return to work for an<br />
<strong>FRS</strong> employer or if you return to <strong>FRS</strong> work for an <strong>FRS</strong> employer more than 5 years after your<br />
termination date, you will forfeit your unvested account balance.<br />
If you leave <strong>FRS</strong>-covered employment after vesting in your <strong>Investment</strong> <strong>Plan</strong> benefit, but before your<br />
transferred Pension <strong>Plan</strong> benefit has vested, you may only receive your vested <strong>Investment</strong> <strong>Plan</strong><br />
benefit. However, if you take any distribution from your <strong>Investment</strong> <strong>Plan</strong> benefit, the Pension <strong>Plan</strong><br />
benefit you transferred into the <strong>Investment</strong> <strong>Plan</strong> will be forfeited. If you do not take a distribution of<br />
your <strong>Investment</strong> <strong>Plan</strong> benefit, the Pension <strong>Plan</strong> benefit you transferred into the <strong>Investment</strong> <strong>Plan</strong> will be<br />
placed in a suspense account, where it will accrue actual investment earnings.<br />
In the <strong>FRS</strong> <strong>Investment</strong> <strong>Plan</strong>, you can take all of the contributions and earnings in your account after<br />
vesting once you terminate employment with all <strong>FRS</strong> employers. Or you can roll the balance over to<br />
another employer’s retirement plan (if permitted by that plan), roll the balance over to an IRA<br />
(Individual Retirement Account) or leave the value of your account in the <strong>FRS</strong> <strong>Investment</strong> <strong>Plan</strong> until a<br />
later date when you may take a distribution. (See “Distributions from the <strong>FRS</strong> <strong>Investment</strong> <strong>Plan</strong>” for<br />
more information.)<br />
Your retirement benefit will depend upon your account balance and the type of payout you choose<br />
(e.g., quarterly withdrawals of 1% of the account value, monthly withdrawals, lifetime annuity, lifetime<br />
annuity with annual 3% increases, etc.). Payout distribution options are discussed later.<br />
Please understand that these vesting requirements and the normal retirement age are established by<br />
the Florida Legislature and codified in the Florida Statutes. They are subject to change.<br />
Reference:<br />
Sections 121.4501(2)(m) and (6), F.S.<br />
Section 19-12.006, F.A.C.<br />
8<br />
The My<strong>FRS</strong> Financial Guidance Program — Use It No Matter Which <strong>Plan</strong> You Choose<br />
Phone: My<strong>FRS</strong> Financial Guidance Line: 1-866-446-9377 (TTY: 1-888-429-2160) •<br />
Online: My<strong>FRS</strong>.com • Retirement and Financial <strong>Plan</strong>ning Workshops offered in some locations
As a new employee, how do I enroll in the <strong>FRS</strong> <strong>Investment</strong> <strong>Plan</strong><br />
Eligible new employees will be enrolled automatically in the <strong>FRS</strong> Pension <strong>Plan</strong> on their first day of<br />
employment and may, within five months following their month of hire, elect to participate in the <strong>FRS</strong><br />
<strong>Investment</strong> <strong>Plan</strong> instead of the <strong>FRS</strong> Pension <strong>Plan</strong>. Enrollment in the <strong>FRS</strong> <strong>Investment</strong> <strong>Plan</strong> will be<br />
retroactive to the date of hire. The <strong>FRS</strong> <strong>Investment</strong> <strong>Plan</strong> effective date will be established as the first<br />
of the month following the month in which the enrollment form is received or the online enrollment is<br />
processed by the <strong>Plan</strong> Administrator. From the date of hire until the effective date, contributions will<br />
be paid at the blended contribution rate. From the effective date forward, contributions will be paid at<br />
the full <strong>FRS</strong> <strong>Investment</strong> <strong>Plan</strong> contribution rate. If you decide to join the <strong>Investment</strong> <strong>Plan</strong> as a newly<br />
hired employee, the sooner you make the decision during your 5-month election window, the sooner<br />
you will receive the full retirement contributions to your account for the <strong>Investment</strong> <strong>Plan</strong>.<br />
Your enrollment period will end at 4:00 p.m. Eastern time, on the last business day of the fifth month<br />
following your month of hire. If no active enrollment is made during this period you will remain in the<br />
<strong>FRS</strong> Pension <strong>Plan</strong>.<br />
All employees can use either the enrollment form for their retirement class available online at<br />
My<strong>FRS</strong>.com, or from your employer. If employed in a position covered under the Regular Class or<br />
Special Risk Class of membership, you may optionally enroll online at My<strong>FRS</strong>.com, by calling the tollfree<br />
My<strong>FRS</strong> Financial Guidance Line at 1-866-446-9377, Option 4, or by using the short ELE-1-EZ<br />
Enrollment Form available online at My<strong>FRS</strong>.com.<br />
Regardless of which enrollment method you use, the terms and conditions set out in the <strong>FRS</strong> ELE-1<br />
enrollment form will apply.<br />
Example: If you are hired on April 15, you are automatically enrolled in the <strong>FRS</strong> Pension <strong>Plan</strong>. You<br />
will have until the last business day in September to choose the <strong>FRS</strong> <strong>Investment</strong> <strong>Plan</strong>. If you elect to<br />
join the <strong>FRS</strong> <strong>Investment</strong> <strong>Plan</strong> on May 3, your retirement plan transfer date (i.e., effective date) to the<br />
<strong>FRS</strong> <strong>Investment</strong> <strong>Plan</strong> will be June 1. The employer contributions paid to the <strong>FRS</strong> on your behalf<br />
between April 15 and May 30 will be the amounts required for the <strong>FRS</strong> Pension <strong>Plan</strong> under the uniform<br />
contribution rate system (blended contribution rate system) specified in Section 121.71, Florida<br />
Statutes. Those amounts will be transferred to your <strong>FRS</strong> <strong>Investment</strong> <strong>Plan</strong> account and represent your<br />
opening account balance in June. Thereafter, starting with the month of June, your employer will<br />
make the required contributions based on your membership class in the <strong>FRS</strong> <strong>Investment</strong> <strong>Plan</strong>.<br />
However, April 15 will be considered your beginning effective date for vesting purposes and for <strong>FRS</strong><br />
<strong>Investment</strong> <strong>Plan</strong> membership.<br />
The contribution rates under the uniform contribution rate system are lower than the <strong>FRS</strong> <strong>Investment</strong><br />
<strong>Plan</strong> contribution rates (except for the Senior Management Service and Special Risk Administrative<br />
Support Classes). So, if you intend to enroll in the <strong>FRS</strong> <strong>Investment</strong> <strong>Plan</strong>, you will be advantaged by<br />
enrolling early in your enrollment period.<br />
Note: Under certain circumstances, you may be able to cancel a retirement plan election. See “Can I<br />
cancel a retirement plan election once it has been made” for further information.<br />
Reference:<br />
Sections 121.4501(4), 121.71, and 121.72, F.S.<br />
Section 19-11.006, F.A.C.<br />
9<br />
The My<strong>FRS</strong> Financial Guidance Program — Use It No Matter Which <strong>Plan</strong> You Choose<br />
Phone: My<strong>FRS</strong> Financial Guidance Line: 1-866-446-9377 (TTY: 1-888-429-2160) •<br />
Online: My<strong>FRS</strong>.com • Retirement and Financial <strong>Plan</strong>ning Workshops offered in some locations
HOW THE <strong>FRS</strong> INVESTMENT PLAN OPERATES<br />
What are the <strong>FRS</strong> membership classifications<br />
Regular Class — This class consists of <strong>FRS</strong> employees who do not qualify for membership in the<br />
Special Risk, Special Risk Administrative Support, Elected Officers, or Senior Management Service<br />
Classes.<br />
Special Risk Class — This class consists of employees who meet the criteria set forth in the Florida<br />
Statutes and accompanying rules in the Florida Administrative Code to qualify for this class and are<br />
employed as law enforcement officers, firefighters (including fire prevention and firefighting training<br />
positions, and aerial surveillance pilots for the Department of Agriculture and Consumer Services),<br />
correctional officers or community-based correctional probation officers, paramedics or emergency<br />
medical technicians, certain professional health care workers employed by the Department of<br />
Corrections and Department of Children and Family Services, in positions within correctional and<br />
forensic facilities, youth custody officers, or certain forensic employees employed by the Florida<br />
Department of Law Enforcement, Division of State Fire Marshall, local government law enforcement<br />
agency, or Medical Examiner’s office.<br />
Special Risk Administrative Support Class — This class consists of special risk employees who are<br />
transferred or reassigned to a non-special risk law enforcement, firefighting, correctional, or<br />
emergency medical care administrative support position within an <strong>FRS</strong> special risk employing agency<br />
and meet the criteria set forth in the Florida Statutes.<br />
Elected Officers’ Class (EOC) — This class consists of employees filling the office of Governor,<br />
Lieutenant Governor, Cabinet Officer, Legislator, Supreme Court Justice, district court of appeal judge,<br />
circuit judge, county court judge, state attorney, or public defender. Elected county officials in the<br />
following offices may also belong to this class: sheriff, tax collector, property appraiser, supervisor of<br />
elections, school board member, school board superintendent, clerk of circuit court, and county<br />
commissioner. Additionally, cities and special districts have had two opportunities to place their<br />
elected officials in the EOC.<br />
Senior Management Service Class (SMSC) — This class consists of employees of the Senior<br />
Management Service of state government, community college presidents, appointed school board<br />
superintendents, county and city managers, selected managerial staff of the Legislature, the Auditor<br />
General and selected managerial staff in the Office of the Auditor General, the Executive Director of<br />
the Ethics Commission, the State University System Executive Service and university presidents,<br />
selected managerial staff of the State Board of Administration of Florida, assistant state attorneys,<br />
assistant public defenders, assistant statewide prosecutors, assistant attorneys general, judges of<br />
compensation claims, capital collateral regional counsels and assistant capital collateral regional<br />
counsels, county health department directors and county health department administrators of the<br />
Department of Health, and selected managerial staff with the Judicial Branch, as well as elected<br />
officials who chose to join the SMSC in lieu of the EOC. Local government agencies may designate<br />
additional non-elective managerial positions for SMSC membership.<br />
Reference:<br />
Section 121.021(12), F.S.<br />
Section 19-11.006(4), F.A.C.<br />
10<br />
The My<strong>FRS</strong> Financial Guidance Program — Use It No Matter Which <strong>Plan</strong> You Choose<br />
Phone: My<strong>FRS</strong> Financial Guidance Line: 1-866-446-9377 (TTY: 1-888-429-2160) •<br />
Online: My<strong>FRS</strong>.com • Retirement and Financial <strong>Plan</strong>ning Workshops offered in some locations
How are contributions made to my account in the <strong>FRS</strong> <strong>Investment</strong> <strong>Plan</strong><br />
Employers are required to submit retirement contributions to the Division of Retirement no later than<br />
the fifth business day of each month following the month wages are earned. Note that Florida law<br />
neither requires nor permits you to make contributions to your <strong>FRS</strong> <strong>Investment</strong> <strong>Plan</strong> account from your<br />
own funds. The amount contributed by your employer on your behalf is equal to a percentage of your<br />
gross monthly salary, based on your employment class.<br />
Employment Class<br />
Rate<br />
Regular ...................................................................................................... 9.00%<br />
Special Risk............................................................................................. 20.00%<br />
Special Risk Administrative Support........................................................ 11.35%<br />
Elected Officers<br />
Legislators.................................................................................... 13.40%<br />
Governor, Lt. Governor, Cabinet Officers .................................... 13.40%<br />
State Attorney, Public Defenders................................................. 13.40%<br />
Justices, Judges .......................................................................... 18.90%<br />
<strong>County</strong> Elected Officers ............................................................... 16.20%<br />
Senior Management Service ................................................................... 10.95%<br />
Upon receipt of the contributions, the Division balances the payroll and transfers the data and<br />
contributions to the <strong>Investment</strong> <strong>Plan</strong> Administrator for <strong>Investment</strong> <strong>Plan</strong> members. Payroll information<br />
is electronically transmitted to the <strong>Investment</strong> <strong>Plan</strong> Administrator daily. The <strong>Investment</strong> <strong>Plan</strong><br />
Administrator posts contributions to members’ accounts within two business days of receipt of the<br />
information. If the contributions are delayed from posting as a result of circumstances beyond our<br />
reasonable control, such as Acts of God or other force majeure events, no investment gains will be<br />
payable as a result of the delay.<br />
The Internal Revenue Service imposes limits on the amount of your salary that may be used for<br />
contribution purposes, and the amount of contributions that may be made on your behalf. For the<br />
calendar year 2009, the contribution limit is the lesser of $49,000 or 100% of the salary actually paid to<br />
you. This limit includes employer contributions, employee salary reductions, and employee<br />
contributions, in aggregate, to 401(a) retirement plans. Because these limits are high, very few<br />
members will be affected. Your employer will be notified if you approach these limits.<br />
In addition to those contributions paid by your employer to fund your retirement benefit, your employer<br />
contributes additional amounts to fund your Health Insurance Subsidy benefit (1.11%), disability<br />
benefits (will vary depending on employment class), and <strong>FRS</strong> <strong>Investment</strong> <strong>Plan</strong> administration costs<br />
and educational program costs for all <strong>FRS</strong> members (.05%).<br />
Reference: Sections 121.052(7)(c), 121.055(3)(c), 121.4501(1) and (13), 121.72, 121.73, 121.74,<br />
and 121.76, F.S.<br />
Sections 19-12.001, 12.003, and 13.003, F.A.C.<br />
How will the present value of my Pension <strong>Plan</strong> retirement benefit be determined<br />
If you have Pension <strong>Plan</strong> service and elect to join the <strong>Investment</strong> <strong>Plan</strong>, a present value calculation will<br />
be done to determine your Accumulated Benefit Obligation (ABO), as follows.<br />
11<br />
The My<strong>FRS</strong> Financial Guidance Program — Use It No Matter Which <strong>Plan</strong> You Choose<br />
Phone: My<strong>FRS</strong> Financial Guidance Line: 1-866-446-9377 (TTY: 1-888-429-2160) •<br />
Online: My<strong>FRS</strong>.com • Retirement and Financial <strong>Plan</strong>ning Workshops offered in some locations
First, the Division of Retirement will calculate your present value using a formula developed by the<br />
Pension <strong>Plan</strong>'s actuary, in accordance with Florida law. The <strong>FRS</strong> actuary annually evaluates whether<br />
the Pension <strong>Plan</strong> is adequately funded. The formula to compute your current benefit is:<br />
Years of<br />
Creditable<br />
Service<br />
X<br />
Percentage Value (depends<br />
on class of <strong>FRS</strong><br />
membership: 1.6% for<br />
Regular Class)<br />
X<br />
Average Final Compensation<br />
(average of highest 5 years<br />
of salary)<br />
= Yearly Benefit<br />
at Normal<br />
Retirement<br />
Date<br />
Then the Division projects the total yearly benefits collected during retirement over your expected<br />
lifetime (including a 3% annual increase in benefits). This stream of increasing annual payments is<br />
converted to a single lump sum – a "present value" (value in today's dollars) using an actuarial<br />
conversion factor. The conversion factor reflects a 7.75 percent interest rate and mortality tables<br />
specified by Florida Statutes. Please note that the conversion factor will increase monthly until you<br />
reach your normal retirement date and will decrease for each month after the normal retirement date.<br />
Example: Let's say an employee is age 31 and has 12 years of Regular Class <strong>FRS</strong> service. The<br />
employee's normal retirement age will be 49 for his/her class of membership (the point when 30 years<br />
of service would be reached).<br />
The employee's earnings for the highest five fiscal years are $31,263, $32,826, $34,467, $36,190, and<br />
$38,000. So the employee's Average Final Compensation is the average of these numbers, or<br />
$34,549.<br />
12<br />
Years of<br />
Creditable Service<br />
X 1.6%<br />
Percentage<br />
Value<br />
X $34,549<br />
Average Final<br />
Compensation<br />
= $6,633<br />
Yearly Benefit at Normal Retirement<br />
Date<br />
$6,633<br />
Yearly Benefit<br />
X 4.0413<br />
Conversion Factor<br />
(determined by actuary)<br />
= $26,806 2<br />
Present Value of Current Pension Benefit<br />
(Transfer Amount)<br />
Reference:<br />
Sections 121.4501(3)(c) and (4)(e), F.S.<br />
Sections 19-11.006(2)(a) and 11.007(2)(e), F.A.C.<br />
2 Dollar amounts are rounded to the nearest whole dollar.<br />
12<br />
The My<strong>FRS</strong> Financial Guidance Program — Use It No Matter Which <strong>Plan</strong> You Choose<br />
Phone: My<strong>FRS</strong> Financial Guidance Line: 1-866-446-9377 (TTY: 1-888-429-2160) •<br />
Online: My<strong>FRS</strong>.com • Retirement and Financial <strong>Plan</strong>ning Workshops offered in some locations
What investment options are available in the <strong>FRS</strong> <strong>Investment</strong> <strong>Plan</strong><br />
The <strong>FRS</strong> <strong>Investment</strong> <strong>Plan</strong> offers a diversified mix of investment funds that span the risk-return<br />
spectrum 3 . On the <strong>FRS</strong> Internet site, My<strong>FRS</strong>.com, you can review the Fund Thumbnails, Fund<br />
Profiles, Fund Details, Fund Scorecards, and the <strong>Investment</strong> Fund <strong>Summary</strong> by clicking on<br />
“<strong>Investment</strong> Funds” in the top tool bar. These documents contain descriptions of the available<br />
investment funds (including investment objective, fund management, investment risk and fund<br />
expenses, etc.) to help you make informed investment decisions (additional detailed information on<br />
each of the investment funds is available upon request). You can also visit this site to access the<br />
Financial Engines Personal Online Advisor service, which can provide specific investment guidance.<br />
If you do not have access to the Internet, you can call the My<strong>FRS</strong> Financial Guidance Line toll-free at<br />
1-866-446-9377 (TTY: 1-888-429-2160), Option 2, and have a professional financial planner explain<br />
the available options or walk you through the online services.<br />
Reference:<br />
Sections 121.4501(9) and (15)(c), F.S.<br />
Sections 19-13.004(8)-(11), F.A.C.<br />
How can I change my investment options in the <strong>FRS</strong> <strong>Investment</strong> <strong>Plan</strong><br />
You can generally change your investment allocation at any time either online or by telephoning ING,<br />
the <strong>FRS</strong> <strong>Investment</strong> <strong>Plan</strong> Administrator. Generally, these changes can be made at no cost. However,<br />
some funds restrict your ability to move your money under certain circumstances under an excessive<br />
fund trading policy (see below). If you do not have access to the Internet website at My<strong>FRS</strong>.com, you<br />
can call the My<strong>FRS</strong> Financial Guidance Line toll-free at 1-866-446-9377 (TTY: 1-888-429-2160),<br />
Option 4, and request an ING representative help in making the changes, and to obtain a copy of the<br />
Excessive Fund Trading Policy (also available on My<strong>FRS</strong>.com by clicking on “<strong>Investment</strong> Funds” in the<br />
top tool bar).<br />
Changes to the investment of your existing account balance will generally take effect at the close of<br />
business on the day your request was made, provided that the request was completed by 4 p.m.<br />
Eastern time. If your request is completed after 4 p.m. Eastern time or on a non-business day, your<br />
change will generally take effect on the next business day that the financial markets are open.<br />
Changes to the investment of future contributions to your account generally take effect with the next<br />
monthly payroll.<br />
Reference:<br />
Section 121.4501(9), F.S.<br />
Section 19-11.004, F.A.C.<br />
What is the Excessive Fund Trading Policy<br />
The SBA has developed a policy to help protect all <strong>Investment</strong> <strong>Plan</strong> members by preventing any shortterm<br />
excessive fund trading within the <strong>FRS</strong> <strong>Investment</strong> <strong>Plan</strong>. Excessive fund trading, in which<br />
members move money in and out of funds on a frequent basis to try to capture short-term gains, can<br />
3 Note that there can be risk in holding a large portion of your account balance in a single fund (unless that fund is a<br />
reasonably diversified fund, such as a balanced fund). For further information on diversifying your account, please call the<br />
My<strong>FRS</strong> Financial Guidance Line at 1-866-446-9377 (TTY: 1-888-429-2160), Option 2, or visit My<strong>FRS</strong>.com. Additional<br />
information on investing and diversification can be found on the U.S. Department of Labor’s website at<br />
www.dol.gov/ebsa/investing.html.<br />
13<br />
The My<strong>FRS</strong> Financial Guidance Program — Use It No Matter Which <strong>Plan</strong> You Choose<br />
Phone: My<strong>FRS</strong> Financial Guidance Line: 1-866-446-9377 (TTY: 1-888-429-2160) •<br />
Online: My<strong>FRS</strong>.com • Retirement and Financial <strong>Plan</strong>ning Workshops offered in some locations
have a negative impact on the funds involved. It can drive up a fund’s trading costs which increase<br />
costs to all fund shareholders. It can also complicate a fund’s portfolio management and reduce the<br />
fund’s investment returns.<br />
Anyone with an account in the <strong>FRS</strong> <strong>Investment</strong> <strong>Plan</strong> is subject to the Policy, including current<br />
employees, previous employees, members who have rolled over DROP funds into the <strong>Investment</strong><br />
<strong>Plan</strong>, surviving beneficiaries, and other alternate payees. The Policy applies to transfers of monies<br />
between funds and does not affect any transaction that is initiated for purposes of depositing employer<br />
payroll contributions, processing a distribution, or any Administrator-initiated transaction (e.g.,<br />
processing a QDRO, mapping assets from terminated funds, etc.). The latter three activities are<br />
termed “exempt transactions.”<br />
Foreign and global investment funds are subject to a minimum holding period of 7-calendar days<br />
following any non-exempt transfers into such funds. For example, if you transfer $5,000 into one of the<br />
foreign or global funds on November 4, you will not be able to transfer any amount out of that fund until<br />
November 12, except for a distribution out of the plan.<br />
All investment funds (except money market funds) are subject to the following controls in order to<br />
mitigate excessive fund trading:<br />
Members engaging in one or more Market Timing Trades (as defined below) in authorized funds<br />
will receive a warning letter sent by U.S. mail. The warning letter will notify the member that<br />
Market Timing trades have been identified in his/her account and any additional violations will<br />
result in a direction letter.<br />
Members engaging in one or more Market Timing Trades and who have previously received a<br />
warning letter will be sent a direction letter by courier. The SBA may require non-automated trade<br />
instructions for at least one full calendar month following the date of the direction letter.<br />
Subsequent violations may require members to conduct trades via paper trading forms mailed<br />
certified/return-receipt to the SBA. Automated trade instructions include the Internet.<br />
The following definitions apply:<br />
Market Timing Trade - is a member-directed series of trades that meet both of the following two<br />
criteria:<br />
The series of transactions are Roundtrip Trades.<br />
The series of transactions are, in aggregate, $75,000 or more within 30 calendar days (e.g., a<br />
purchase of fund shares for $50,000 and a sale of $35,000 of the same fund’s shares the next day<br />
would be an aggregate trade amount of $85,000).<br />
Roundtrip Trade – is one or more transfers into an investment fund and one or more transfers out of<br />
the same investment fund in either order (i.e., in/out or out/in) within a 30 calendar day period 4 ,<br />
regardless of any multiple transfers from or to other different investment funds during the Roundtrip<br />
Trade.<br />
The specific funds subject to the foreign and global restrictions are listed in Chart A. You can get your<br />
questions answered by calling the toll-free My<strong>FRS</strong> Financial Guidance Line and connecting to a<br />
financial planner.<br />
4 Roundtrip and Market Timing Trades are calculated using a rolling 30-calendar day time period. For example, if a trade<br />
occurs on May 15, the 30-calendar day period extends from May 15 through June 13.<br />
14<br />
The My<strong>FRS</strong> Financial Guidance Program — Use It No Matter Which <strong>Plan</strong> You Choose<br />
Phone: My<strong>FRS</strong> Financial Guidance Line: 1-866-446-9377 (TTY: 1-888-429-2160) •<br />
Online: My<strong>FRS</strong>.com • Retirement and Financial <strong>Plan</strong>ning Workshops offered in some locations
Examples: The following are examples only. They are not an exhaustive list of all possible<br />
transactions. Members avoiding these examples will not necessarily avoid the impact of the excessive<br />
fund trading policy since other transactions may meet the definitions of Market Timing Trades or<br />
Excessive Trading.<br />
a. If Member A transfers $50,000 out of Fund A and into Fund B on Monday and then transfers<br />
$20,000 out of Fund B on Tuesday, the transaction is a Roundtrip Trade but is not a Market<br />
Timing Trade because the aggregate amount of $75,000 has not been met.<br />
b. If Member A transfers $50,000 out of Fund A and into Fund B on Monday and then transfers<br />
$55,000 out of Fund B on the following Monday, the transaction is a Roundtrip Trade and a<br />
Market Timing Trade because the aggregate amount of all trades in and out of Fund B has<br />
exceeded $75,000 ($50,000 + $55,000 = $105,000) within a 30 day period.<br />
c. If Member A transfers $5,000 out of Fund A and into Fund B on November 1 and then transfers<br />
$25,000 out of Fund A and into Fund B on November 3 and then transfers $10,000 out of Fund<br />
A and into Fund B on November 5 and then transfers $40,000 out of Fund B and into Fund A<br />
on November 15, the entire series of transactions constitutes a Roundtrip Trade and is a<br />
Market Timing Trade because the aggregate amount of all trades into and out of Funds A and<br />
B each exceeded $75,000 within a 30 day period.<br />
d. If Member A transfers $5,000 out of Fund A and puts $2,500 into Fund B and $2,500 into Fund<br />
C on December 1 and then transfers $25,000 out of Fund A and puts $20,000 into Fund B and<br />
$5,000 into Fund C on December 5, and then transfers $10,000 out of Fund A and puts<br />
$10,000 into Fund C on December 6 and then transfers $23,000 out of Fund B into Fund A and<br />
$20,000 out of Fund C into Fund A on December 16, the entire series of transactions<br />
constitutes a Roundtrip Trade and is a Market Timing Trade because the aggregate amount of<br />
all trades into and out of Fund A exceeded $75,000 within a 30 day period. It is irrelevant that<br />
money has come out of one fund and been transferred into two funds because the money has<br />
been returned to the original fund.<br />
e. Member A transfers $50,000 out of Fund A and into a foreign stock fund, which already<br />
contains $100,000, on October 1, so that on October 1, the foreign stock fund contains<br />
$150,000. The Member must wait until October 9 to transfer any or all of the $150,000 in funds<br />
out of the foreign stock fund.<br />
f. A member has $250,000 in his <strong>FRS</strong> <strong>Investment</strong> <strong>Plan</strong> account and is the subject of a QDRO<br />
with the result that the member’s spouse becomes entitled to half of the member’s <strong>FRS</strong><br />
<strong>Investment</strong> <strong>Plan</strong> account. A total of $125,000 is transferred from the member’s account to a<br />
newly-established account for the member’s spouse and the funds are put into a foreign stock<br />
fund on December 1. On December 5, the member’s spouse rolls over the entire $125,000<br />
into an IRA. This is neither a Roundtrip Trade nor a Market Timing Trade because the transfer<br />
is an exempt transaction.<br />
g. A member transfers $32,000 into Fund A on August 5 and then transfers $32,000 out of Fund<br />
A on August 11 and then transfers $31,000 into Fund A on August 17 and finally transfers<br />
$31,000 out of Fund A on August 18. The entire series of trades are Roundtrip trades and the<br />
trades are also a Market Timing Trade because the aggregate amount of all trades exceeded<br />
$75,000 within a 30 day period.<br />
h. A member transfers $32,000 into Fund A on September 10 and then transfers $32,000 out of<br />
Fund A on September 15 and then transfers $31,000 into Fund A on September 27. The entire<br />
series of trades are Roundtrip Trades and is a Market Timing Trade because the aggregate<br />
amount of all trades exceeded $75,000 within a 30 day period.<br />
15<br />
The My<strong>FRS</strong> Financial Guidance Program — Use It No Matter Which <strong>Plan</strong> You Choose<br />
Phone: My<strong>FRS</strong> Financial Guidance Line: 1-866-446-9377 (TTY: 1-888-429-2160) •<br />
Online: My<strong>FRS</strong>.com • Retirement and Financial <strong>Plan</strong>ning Workshops offered in some locations
Trading Restrictions of Specific Funds<br />
Effective October 16, 2007, the Securities and Exchange Commission (SEC) under Rule 22c-2 of the<br />
<strong>Investment</strong> Company Act of 1940 began permitting all open-end mutual funds either to impose trading<br />
restrictions or levy monetary penalties on members’ conducting market timing transactions. As a<br />
result, <strong>Investment</strong> <strong>Plan</strong> members with assets in the three specified mutual funds (listed in Chart B<br />
below) on or after October 16, 2007 may be impacted.<br />
If requested, the <strong>FRS</strong> <strong>Investment</strong> <strong>Plan</strong> Administrator will be required to provide the mutual fund<br />
companies listed in Chart B access to information on <strong>Investment</strong> <strong>Plan</strong> members’ trading activity to<br />
enforce their trading restrictions. Any monetary penalties imposed by the fund will be withdrawn from<br />
the member’s <strong>Investment</strong> <strong>Plan</strong> account. The penalty will be deducted first from any balance in the<br />
affected fund, and secondly in a pro-rata share from the balances in any other funds in the member’s<br />
<strong>Investment</strong> <strong>Plan</strong> account.<br />
In an attempt to prevent <strong>Investment</strong> <strong>Plan</strong> members from having to pay any monetary penalties or<br />
being blocked from making additional purchases, the <strong>Investment</strong> <strong>Plan</strong> trading system will use “best<br />
efforts” to block restricted trades in the three affected mutual funds. If a restricted trade is not blocked,<br />
the member will be responsible for paying any monetary penalties and/or be subject to trading<br />
restrictions. It is the responsibility of the member to comply with the trading restrictions in Chart B.<br />
The trading restrictions in Chart B do not apply to <strong>Investment</strong> <strong>Plan</strong> funds that are classified as<br />
institutional funds or to mutual funds for which the <strong>FRS</strong> has received exemptions from the fund<br />
companies. The <strong>FRS</strong> <strong>Investment</strong> <strong>Plan</strong> has been granted exemptions for the following mutual funds:<br />
American Beacon Small-Cap Value Fund (S99) American Funds EuroPacific Growth Fund (F20)<br />
Pioneer Fund (S20) American Funds New Perspective Fund (F40)<br />
The restrictions in Chart B are in addition to all the other trading restrictions outlined in this section, as<br />
noted in Chart A.<br />
Please review these policies carefully before making any <strong>Investment</strong> <strong>Plan</strong> transactions. You can<br />
review a copy of the current <strong>FRS</strong> <strong>Investment</strong> <strong>Plan</strong> Excessive Fund Trading Policy online at<br />
My<strong>FRS</strong>.com.<br />
CHART A • <strong>FRS</strong> INVESTMENT PLAN EXCESSIVE FUND TRADING POLICY – EFFECTIVE NOVEMBER 2003<br />
Fund Name Restriction Penalty<br />
<strong>FRS</strong> Select Foreign Stock Index (F10)<br />
American Funds EuroPacific Growth (F20)<br />
American Funds New Perspective (F40)<br />
Prohibits selling out of the fund<br />
within 7-calendar days of<br />
purchasing into the fund. trades from occurring.<br />
All <strong>Investment</strong> <strong>Plan</strong> funds except the <strong>FRS</strong> Select<br />
Yield Plus Money Market Active Fund (M10)]<br />
Prohibits multiple round-trips* in<br />
and out of any investment fund<br />
totaling $75,000 or more within<br />
a 30-day period.<br />
NA – The <strong>Investment</strong> <strong>Plan</strong> trading<br />
system automatically blocks these<br />
Restrictions may be imposed on a<br />
member’s ability to make future<br />
fund transfers.<br />
*The <strong>FRS</strong> <strong>Investment</strong> <strong>Plan</strong> defines a roundtrip trade as one or more transfers into an investment fund and one or more transfers<br />
out of the same investment fund in either order (i.e., in/out or out/in) within a 30 calendar day period.<br />
16<br />
The My<strong>FRS</strong> Financial Guidance Program — Use It No Matter Which <strong>Plan</strong> You Choose<br />
Phone: My<strong>FRS</strong> Financial Guidance Line: 1-866-446-9377 (TTY: 1-888-429-2160) •<br />
Online: My<strong>FRS</strong>.com • Retirement and Financial <strong>Plan</strong>ning Workshops offered in some locations
CHART B • SPECIFIC FUND TRADING RESTRICTIONS – EFFECTIVE OCTOBER 16, 2007<br />
Fund Name Restriction Penalty<br />
PIMCO High Yield (B55) Prohibits selling out of the fund within 30<br />
days of purchasing into the fund.<br />
2% redemption fee of the Net Asset<br />
Value of fund shares sold or<br />
exchanged.<br />
Blocked from making additional<br />
purchases for 85 days.<br />
Fidelity Growth Company (S80) Limits two roundtrip transactions*<br />
within a rolling 90-day period.<br />
Limits four roundtrip transactions<br />
within a rolling 12-month period.<br />
T. Rowe Price Small-Cap Stock (S97) Prohibits selling out of the fund within 90 Blocked from making additional<br />
days of purchasing into the fund.**<br />
purchases for 90 days.<br />
* Fidelity defines a roundtrip transaction as occurring when a member buys and then sells shares of a fund within 30 days.<br />
** T. Rowe Price defines a roundtrip transaction as one purchase and one sale or one sale and one purchase of the same fund.<br />
Reference:<br />
Section 121.4501(9), F.S.<br />
Section 19-11.004, F.A.C.<br />
What is my creditable service<br />
A member receives one month of service credit for each month in which any salary is paid for work<br />
performed. Members may not purchase service credit (e.g., for past service, prior service, certain<br />
military service, leaves-of-absence, etc.) to increase their <strong>FRS</strong> <strong>Investment</strong> <strong>Plan</strong> retirement benefit.<br />
This includes the upgrade of previous service to another membership class (e.g., Senior Management<br />
Service Class, Special Risk Class, or Elected Officers’ Class). If an <strong>FRS</strong> covered employee has<br />
additional service credit he/she wishes to use towards his/her retirement, he/she must purchase or<br />
upgrade such service under the <strong>FRS</strong> Pension <strong>Plan</strong> before he/she becomes a member in the <strong>FRS</strong><br />
<strong>Investment</strong> <strong>Plan</strong>.<br />
There are certain types of service such as military, workers’ compensation, and suspension and<br />
reinstatement that are paid for by the employer and may be creditable for <strong>FRS</strong> <strong>Investment</strong> <strong>Plan</strong><br />
members if certain requirements are met for that type of service. The military service must be as a<br />
leave of absence and must be eligible for purchase under the Uniformed Services Employment and<br />
Reemployment Act (Chapter 43 of Title 38 of the United States Code).<br />
The <strong>FRS</strong> <strong>Investment</strong> <strong>Plan</strong> complies with the provisions of the Heroes Earnings Assistance and Relief<br />
Tax (HEART) Act of 2008, which helps protect the rights of military personnel on active duty. Because<br />
<strong>FRS</strong> records do not indicate whether a member serves in the military, it is the responsibility of the<br />
member and/or the beneficiary to notify us and provide sufficient documentation to claim any benefits<br />
under this Act.<br />
Reference:<br />
Sections 121.021(17), 121.4501(3) and (22), F.S.<br />
Section 19-13.002, F.A.C.<br />
What are the various types of employment status<br />
<br />
You are considered a rehired employee if: 1) you were formerly employed by an <strong>FRS</strong> employer<br />
in a regularly established position that was covered for <strong>FRS</strong> purposes, 2) you terminated<br />
employment without taking any distribution of benefits, and 3) you later returned to <strong>FRS</strong><br />
17<br />
The My<strong>FRS</strong> Financial Guidance Program — Use It No Matter Which <strong>Plan</strong> You Choose<br />
Phone: My<strong>FRS</strong> Financial Guidance Line: 1-866-446-9377 (TTY: 1-888-429-2160) •<br />
Online: My<strong>FRS</strong>.com • Retirement and Financial <strong>Plan</strong>ning Workshops offered in some locations
covered employment. Your <strong>FRS</strong> <strong>Investment</strong> <strong>Plan</strong> account balance must have remained in the<br />
<strong>FRS</strong> <strong>Investment</strong> <strong>Plan</strong>.<br />
If you return to <strong>FRS</strong> covered employment, you will return to the <strong>FRS</strong> <strong>Investment</strong> <strong>Plan</strong>, unless<br />
you decide to use your one-time second election option (the Second Election; see below) to<br />
change to the <strong>FRS</strong> Pension <strong>Plan</strong>.<br />
<br />
You are considered a retired employee from the <strong>FRS</strong> <strong>Investment</strong> <strong>Plan</strong> if you terminate <strong>FRS</strong><br />
covered employment and take a distribution of any kind (lump sum, rollover, annuity, etc.). If<br />
you return to <strong>FRS</strong> covered employment, you are considered a “reemployed retiree” or<br />
“renewed member” and subject to the laws and rules governing such employees. These laws<br />
and rules are enacted by the Florida legislature and implemented by the appropriate agency.<br />
They are subject to change.<br />
As a reemployed retiree, you are considered a new employee and are entitled to choose within<br />
5 months following your month of hire which retirement plan you wish to participate in: the <strong>FRS</strong><br />
Pension <strong>Plan</strong> or the <strong>FRS</strong> <strong>Investment</strong> <strong>Plan</strong>. However, as a reemployed retiree, you are not<br />
entitled to participate in the Special Risk Class, the <strong>FRS</strong> Pension <strong>Plan</strong> DROP program, nor are<br />
you entitled to receive disability benefits from either plan. If these benefits are important to<br />
you, you should consider not taking a distribution upon termination from <strong>FRS</strong> covered<br />
employment, unless you are actually retiring and do not plan to return to <strong>FRS</strong> employment in<br />
the future.<br />
Note: Renewed membership in the <strong>FRS</strong> is not available for reemployed retirees who are<br />
initially reemployed on or after July 1, 2010.<br />
You are considered a newly hired employee if you have never been employed by an <strong>FRS</strong><br />
covered employer in a regularly established position. As a new employee you will have until the<br />
end of the fifth month after your month of hire to choose the <strong>Investment</strong> <strong>Plan</strong>, if you decide to<br />
do so. In the mean time you will be a member of the Pension <strong>Plan</strong>.<br />
Reference:<br />
Sections 121.122, 121.4501(2)(f) and (2)(j), and 121.591, F.S.<br />
Section 19-11.003, F.A.C.<br />
Can I return to employment after I retire<br />
An <strong>Investment</strong> <strong>Plan</strong> member who terminates <strong>FRS</strong>-covered employment and receives any distribution<br />
from his or her <strong>Investment</strong> <strong>Plan</strong> account (including a rollover) is considered a retiree. Retirees may be<br />
reemployed by a private employer or by any non-<strong>FRS</strong> public employer without affecting their<br />
retirement benefits. Retirees may not be reemployed with an <strong>FRS</strong>-participating employer in any<br />
capacity (<strong>FRS</strong>-covered or non-covered, including temporary, part-time, OPS and regularly established<br />
positions) for the first 12 months after taking a distribution without suspending their retirement benefits,<br />
except under limited circumstances as described below. Suspension of benefits, in this case, refers to<br />
the retiree’s inability to take additional distributions from their <strong>Investment</strong> <strong>Plan</strong> account balance until<br />
certain requirements have been met. If an <strong>FRS</strong> <strong>Investment</strong> <strong>Plan</strong> member is reemployed with an <strong>FRS</strong><br />
employer prior to taking a distribution of his/her benefits, he or she will not be considered to have<br />
retired.<br />
If an <strong>FRS</strong> <strong>Investment</strong> <strong>Plan</strong> member is reemployed by an <strong>FRS</strong> participating employer within the 6<br />
calendar month period after taking a distribution (retiring), his or her retirement will be voided. The<br />
member and employer will be required to repay any benefits received; the member’s <strong>FRS</strong> membership<br />
18<br />
The My<strong>FRS</strong> Financial Guidance Program — Use It No Matter Which <strong>Plan</strong> You Choose<br />
Phone: My<strong>FRS</strong> Financial Guidance Line: 1-866-446-9377 (TTY: 1-888-429-2160) •<br />
Online: My<strong>FRS</strong>.com • Retirement and Financial <strong>Plan</strong>ning Workshops offered in some locations
will then be reinstated. An alternative to repaying these benefits is for the member to terminate<br />
employment for an additional period to satisfy the 6 month termination requirement.<br />
The provisions of the reemployment law vary, depending on whether the member retired and is initially<br />
reemployed by an <strong>FRS</strong> employer before or after July 1, 2010, as follows:<br />
Retirement and Reemployment Prior to July 1, 2010<br />
Returning to Work in an Excepted Position<br />
An <strong>Investment</strong> <strong>Plan</strong> retiree may return to work in certain excepted positions as described below during<br />
and through the 12th month after retirement without impacting the receipt of additional <strong>Investment</strong> <strong>Plan</strong><br />
distributions. Such retiree may return to this limited employment after being off all <strong>FRS</strong>-covered<br />
payrolls for at least 6 calendar months following the month in which the distribution was taken.<br />
Returning to Work in a Non-Excepted Position<br />
An <strong>Investment</strong> <strong>Plan</strong> retiree may return to work in a non-excepted position as described below during<br />
and through the 12th month after retirement; however, no additional <strong>Investment</strong> <strong>Plan</strong> distributions are<br />
permitted until the member terminates employment or completes 12 calendar months of retirement.<br />
Such retiree may return to this limited employment after being off all <strong>FRS</strong>-covered payrolls for at least<br />
6 calendar months following the month in which the distribution was taken.<br />
After 1 Year<br />
Once 1 year has passed since retirement, the retiree can receive further <strong>Investment</strong> <strong>Plan</strong> distributions<br />
even if reemployed by an <strong>FRS</strong> employer.<br />
Renewed Membership<br />
Renewed membership in the <strong>FRS</strong> is available if the member retires and is initially reemployed by an<br />
<strong>FRS</strong> employer in an <strong>FRS</strong>-covered position prior to July 1, 2010.<br />
19<br />
The My<strong>FRS</strong> Financial Guidance Program — Use It No Matter Which <strong>Plan</strong> You Choose<br />
Phone: My<strong>FRS</strong> Financial Guidance Line: 1-866-446-9377 (TTY: 1-888-429-2160) •<br />
Online: My<strong>FRS</strong>.com • Retirement and Financial <strong>Plan</strong>ning Workshops offered in some locations
Exceptions to the Reemployment Law (apply only if retired and initially employed prior to July 1, 2010)<br />
If you retire from the <strong>Investment</strong> <strong>Plan</strong> and are initially reemployed prior to July 1, 2010 in any of the<br />
following positions during your first year of retirement, you may be exempt from the reemployment<br />
limitations, or you may be otherwise eligible for a limited exception, as follows:<br />
<br />
<br />
<br />
<br />
<br />
<br />
<br />
<br />
A retiree who is elected or appointed to an elective office is exempt from reemployment<br />
limitations.<br />
A retired justice or judge on temporary assignment to active judicial service pursuant to<br />
Article V of the State Constitution is exempt from the reemployment limitations.<br />
Florida District Schools Boards - After meeting the above termination requirements,<br />
<strong>Investment</strong> <strong>Plan</strong> retirees may be reemployed as classroom teachers on an annual contractual<br />
basis. Additionally, noncontractual employment is allowed without further limitation for<br />
<strong>Investment</strong> <strong>Plan</strong> retirees who are hired as substitute or hourly teachers, education<br />
paraprofessionals, transportation assistants, bus drivers, or food service workers.<br />
Florida School for the Deaf and the Blind - After meeting the above termination<br />
requirements, <strong>Investment</strong> <strong>Plan</strong> retirees may be reemployed as substitute teachers, substitute<br />
residential instructors, or substitute nurses on a noncontractual basis.<br />
Charter Schools – After meeting the above termination requirements, <strong>Investment</strong> <strong>Plan</strong> retirees<br />
may be reemployed as classroom teachers on an annual contractual basis, or as substitute or<br />
hourly teachers on a noncontractual basis.<br />
Developmental Research Schools – After meeting the above termination requirements,<br />
<strong>Investment</strong> <strong>Plan</strong> retirees may be reemployed on an annual contractual basis as classroom<br />
teachers, or as substitute or hourly teachers or educational paraprofessionals on a<br />
noncontractual basis.<br />
Community Colleges – After meeting the above termination requirements, <strong>Investment</strong> <strong>Plan</strong><br />
retirees may be reemployed as adjunct instructors or phased retirement program participants<br />
for up to 780 hours during the first year of retirement as described above.<br />
Universities – After meeting the above termination requirements, <strong>Investment</strong> <strong>Plan</strong> retirees<br />
may be reemployed as adjunct faculty or phased retirement program participants with the State<br />
University System for up to 780 hours during the first year of retirement as described above.<br />
Any affected reemployed retiree who is not eligible for an exception or who exceeds the 780-hour<br />
limitation should notify the <strong>Investment</strong> <strong>Plan</strong> Administrator at 1-866-446-9377, Option 4.<br />
20<br />
The My<strong>FRS</strong> Financial Guidance Program — Use It No Matter Which <strong>Plan</strong> You Choose<br />
Phone: My<strong>FRS</strong> Financial Guidance Line: 1-866-446-9377 (TTY: 1-888-429-2160) •<br />
Online: My<strong>FRS</strong>.com • Retirement and Financial <strong>Plan</strong>ning Workshops offered in some locations
Retirement and Reemployment On or After July 1, 2010<br />
You may not return to employment with an <strong>FRS</strong>-covered employer until you have been retired for 6<br />
calendar months (i.e., 6 calendar months following the month in which a distribution was taken). If<br />
you’ve been retired for 6 calendar months, and you return to employment with an <strong>FRS</strong>-covered<br />
employer during the next 6 months after retirement, no additional <strong>Investment</strong> <strong>Plan</strong> distributions are<br />
permitted until you either terminate employment or complete a total of 12 months of retirement. There<br />
are no reemployment exceptions.<br />
After 1 Year<br />
Once 1 year has passed since retirement, you can receive further <strong>Investment</strong> <strong>Plan</strong> distributions, even<br />
if you are reemployed by an <strong>FRS</strong> employer.<br />
Renewed Membership<br />
Renewed membership in the <strong>FRS</strong> is not available for retired members who are initially reemployed on<br />
or after July 1, 2010.<br />
21<br />
The My<strong>FRS</strong> Financial Guidance Program — Use It No Matter Which <strong>Plan</strong> You Choose<br />
Phone: My<strong>FRS</strong> Financial Guidance Line: 1-866-446-9377 (TTY: 1-888-429-2160) •<br />
Online: My<strong>FRS</strong>.com • Retirement and Financial <strong>Plan</strong>ning Workshops offered in some locations
The following “Roadmap to Reemployment” provides information on when you may return to <strong>FRS</strong>covered<br />
employment after retiring from the <strong>Investment</strong> <strong>Plan</strong>:<br />
Reference:<br />
Sections 121.021(39), 121.091(9), 121.122, 121.4501(2)(f) and (2)(j), F.S.<br />
Section 19-11.003, F.A.C.<br />
22<br />
The My<strong>FRS</strong> Financial Guidance Program — Use It No Matter Which <strong>Plan</strong> You Choose<br />
Phone: My<strong>FRS</strong> Financial Guidance Line: 1-866-446-9377 (TTY: 1-888-429-2160) •<br />
Online: My<strong>FRS</strong>.com • Retirement and Financial <strong>Plan</strong>ning Workshops offered in some locations
How can I make a beneficiary designation<br />
As a member of the <strong>FRS</strong> <strong>Investment</strong> <strong>Plan</strong>, your spouse is automatically your primary beneficiary<br />
unless you designate someone else after your most recent marriage. You may name as beneficiary<br />
any person, organization, trust, or your estate. You may state that beneficiaries share jointly or<br />
sequentially, or that any benefits due to your beneficiary be paid through a trust. If you do not name a<br />
beneficiary or if your beneficiary has died, any benefits will be paid according to Florida law (Section<br />
121.4501(20), Florida Statutes).<br />
You may change your beneficiary at any time. If your designated beneficiary dies or your marital<br />
status changes, it is important for you to submit a new beneficiary designation to be sure your account<br />
is distributed as you wish in case of your death.<br />
You may designate a beneficiary at the time of enrollment or later by completing a beneficiary<br />
designation form (Form IPBEN-1) to name your beneficiaries. To obtain the form, you can call the<br />
My<strong>FRS</strong> Financial Guidance Line toll-free at 1-866-446-9377 (TTY: 1-888-429-2160), Option 4, and<br />
request that it be mailed to you. You can also find the form online at My<strong>FRS</strong>.com. The form must be<br />
sent to the <strong>Investment</strong> <strong>Plan</strong> Administrator.<br />
Florida law requires that if you do not name your spouse as your primary beneficiary, he/she must sign<br />
the beneficiary designation form. See Section 121.4501(20), Florida Statutes. The beneficiary<br />
designation form (Form IPBEN-1) requires that your spouse sign acknowledging that he or she is not<br />
named as your beneficiary.<br />
Your <strong>FRS</strong> Quarterly <strong>Investment</strong> <strong>Plan</strong> Statement, which is mailed to your home address each quarter,<br />
lists your current <strong>Investment</strong> <strong>Plan</strong> account beneficiary(ies). Please be sure to review these<br />
beneficiary(ies) to ensure they are current.<br />
A beneficiary is eligible to designate a beneficiary. Any account balance or benefit payments payable<br />
to the beneficiary of the beneficiary will be paid out immediately upon receipt of the appropriate forms.<br />
Reference:<br />
Section 121.4501(20), F.S.<br />
Sections 19-11.002 and 11.003, F.A.C.<br />
What are my rights to a benefit<br />
If you are an <strong>FRS</strong> <strong>Investment</strong> <strong>Plan</strong> member, you will be vested in employer contributions and earnings<br />
on those contributions when you complete one year of service with a participating <strong>FRS</strong> employer. If<br />
you terminate <strong>FRS</strong>-covered employment before completing one year of service, you will not be eligible<br />
to receive a benefit from the <strong>FRS</strong> <strong>Investment</strong> <strong>Plan</strong>. Instead, the balance in your account will be placed<br />
in a suspense account for up to five years. If you return to <strong>FRS</strong>-covered employment within this 5-year<br />
period, the balance in the suspense account, plus accrued earnings, will be returned to your account.<br />
If you do not return to <strong>FRS</strong>-covered employment within the 5-year period, you forfeit the balance.<br />
If you have transferred a present value amount from the <strong>FRS</strong> Pension <strong>Plan</strong> to your <strong>FRS</strong> <strong>Investment</strong><br />
<strong>Plan</strong> account, you will vest in this transferred amount, plus interest and earnings thereon, when you<br />
have completed six years of service. If you terminate employment with an <strong>FRS</strong>-covered employer<br />
before completing six years of service, such transferred amount will be placed in a suspense account<br />
for up to five years. If you return to <strong>FRS</strong>-covered employment as an eligible employee within this 5-<br />
year period, the amount placed in the suspense account, plus the accrued earnings, will be returned to<br />
23<br />
The My<strong>FRS</strong> Financial Guidance Program — Use It No Matter Which <strong>Plan</strong> You Choose<br />
Phone: My<strong>FRS</strong> Financial Guidance Line: 1-866-446-9377 (TTY: 1-888-429-2160) •<br />
Online: My<strong>FRS</strong>.com • Retirement and Financial <strong>Plan</strong>ning Workshops offered in some locations
your account. If you do not return to <strong>FRS</strong>-covered employment as an eligible employee within the 5-<br />
year period, you will forfeit the amount(s) taken out of your account and placed in suspense.<br />
If you have transferred a present value amount from the <strong>FRS</strong> Pension <strong>Plan</strong> to your <strong>FRS</strong> <strong>Investment</strong><br />
<strong>Plan</strong> account and have at least one year of total service credit from the combined <strong>FRS</strong> Pension <strong>Plan</strong><br />
and <strong>FRS</strong> <strong>Investment</strong> <strong>Plan</strong> service, but less than 6 years of total service, you are entitled to receive the<br />
<strong>FRS</strong> <strong>Investment</strong> <strong>Plan</strong> contributions and earnings in your account after your termination of <strong>FRS</strong>covered<br />
employment. However, if you take a distribution of your <strong>FRS</strong> <strong>Investment</strong> <strong>Plan</strong> account<br />
balance you will forfeit the present value amount transferred from the <strong>FRS</strong> Pension <strong>Plan</strong>. If you take a<br />
distribution of any amount from the <strong>FRS</strong> <strong>Investment</strong> <strong>Plan</strong>, you are considered retired and will not be<br />
eligible for certain <strong>FRS</strong> benefits should you return to <strong>FRS</strong>-covered employment in the future.<br />
Additionally, if you have transferred a present value amount from the <strong>FRS</strong> Pension <strong>Plan</strong> to your <strong>FRS</strong><br />
<strong>Investment</strong> <strong>Plan</strong> account, the service may include the purchase of additional service under the <strong>FRS</strong><br />
Pension <strong>Plan</strong> (e.g., out-of-state-service) that does not count toward the <strong>FRS</strong> Pension <strong>Plan</strong> 6-year<br />
vesting requirements. In this case you must complete a total of 6 years of <strong>FRS</strong> service to be eligible<br />
for your Pension <strong>Plan</strong> transferred balance.<br />
If you elected the Hybrid Option when you selected your <strong>FRS</strong> retirement plan, you are considered a<br />
member of the <strong>FRS</strong> <strong>Investment</strong> <strong>Plan</strong>. After you have completed sufficient service to vest in both the<br />
Pension <strong>Plan</strong> and <strong>Investment</strong> <strong>Plan</strong>, and have met any other requirements for receipt of benefits from<br />
the plans, you may begin receiving your benefits from either plan without affecting your ability to<br />
receive benefits from the other. If, however, you transfer to the <strong>FRS</strong> Pension <strong>Plan</strong> from the <strong>Investment</strong><br />
<strong>Plan</strong> and leave a surplus in your <strong>Investment</strong> <strong>Plan</strong> account, you are considered a member of the<br />
Pension <strong>Plan</strong> and cannot access your surplus <strong>Investment</strong> <strong>Plan</strong> funds until you begin receiving your<br />
Pension <strong>Plan</strong> benefits.<br />
Reference:<br />
Sections 121.4501(2)(m) and (6), F.S.<br />
Section 19-11.006, F.A.C.<br />
How do I update my mailing address or change my name in my <strong>FRS</strong> records<br />
If you are an active <strong>FRS</strong> employee, your member specific demographic information is provided to the<br />
Division of Retirement by your <strong>FRS</strong> employer each month through a monthly payroll file. This file<br />
includes the name and mailing address for all active <strong>FRS</strong> members. To change your name or address<br />
you should report the new name or address to your <strong>FRS</strong> employer and ask them to change it on the<br />
next payroll.<br />
Once you terminate your <strong>FRS</strong>-covered employment you will continue to receive information from the<br />
<strong>Investment</strong> <strong>Plan</strong> as long as you have money in your <strong>Investment</strong> <strong>Plan</strong> account. To change your name<br />
or mailing address after terminating employment you should contact the <strong>Investment</strong> <strong>Plan</strong> Administrator<br />
to request an Address/Name Change Form. If you are requesting a name change, a copy of the court<br />
order, divorce decree, or marriage certificate evidencing the legal name change must be provided.<br />
The <strong>Investment</strong> <strong>Plan</strong> Administrator can also accept a letter which provides the previous address/name<br />
and new address/name, your Social Security number and, if a name change, a copy of the court order,<br />
divorce decree, or marriage certificate evidencing the legal name change. If the form/letter is in good<br />
order, the <strong>Investment</strong> <strong>Plan</strong> Administrator will update the information on the recordkeeping system. For<br />
address changes only, you can make the address change online by logging into My<strong>FRS</strong>.com. For<br />
your security, a confirmation statement will be mailed within two business days to both your current<br />
address on file and the new address provided.<br />
Reference:<br />
Section 19-13.002, F.A.C.<br />
24<br />
The My<strong>FRS</strong> Financial Guidance Program — Use It No Matter Which <strong>Plan</strong> You Choose<br />
Phone: My<strong>FRS</strong> Financial Guidance Line: 1-866-446-9377 (TTY: 1-888-429-2160) •<br />
Online: My<strong>FRS</strong>.com • Retirement and Financial <strong>Plan</strong>ning Workshops offered in some locations
DISTRIBUTIONS FROM THE <strong>FRS</strong> INVESTMENT PLAN<br />
How can I take distributions from the <strong>FRS</strong> <strong>Investment</strong> <strong>Plan</strong><br />
Since the <strong>FRS</strong> <strong>Investment</strong> <strong>Plan</strong> is a retirement plan, you will not be permitted to make withdrawals<br />
from the <strong>Plan</strong> while you are still employed by an <strong>FRS</strong> employer, or knowingly expect to return to<br />
employment with an <strong>FRS</strong> employer in the near term. After you have terminated all <strong>FRS</strong>-covered<br />
employment for three calendar months (following your month of termination), you can request a<br />
distribution of your account. If you have reached the normal retirement requirements of the <strong>FRS</strong><br />
Pension <strong>Plan</strong> for your class of membership (i.e., age 62 with 6 years of service or 30 years of service<br />
for all classes but Special Risk), you may take a one-time distribution of up to 10% of your account<br />
balance after being terminated for one calendar month. This normal retirement requirement also<br />
pertains to <strong>FRS</strong> members who have previously retired from the <strong>FRS</strong>, and returned to <strong>FRS</strong>-covered<br />
employment in another career earning a second retirement benefit from the <strong>FRS</strong>. To receive the 10%<br />
distribution from your “second-career” service you must meet the normal retirement requirements of<br />
the Pension <strong>Plan</strong> using only the service earned during your “second-career”.<br />
If you leave <strong>FRS</strong> employment, you can leave your account invested in the <strong>FRS</strong> <strong>Investment</strong> <strong>Plan</strong> until<br />
you decide to take a distribution from the <strong>Plan</strong>. Your benefit under the <strong>FRS</strong> <strong>Investment</strong> <strong>Plan</strong> consists<br />
of the value of your account. If you are vested in your account, your benefit is payable to you, or to<br />
your designated beneficiary or your estate upon your death. To begin receiving benefits, you must be<br />
terminated from all employment with <strong>FRS</strong>-covered employers for three calendar months (following<br />
your month of termination), unless you meet the normal retirement requirements of the <strong>FRS</strong> Pension<br />
<strong>Plan</strong>, in which case you may receive a one-time distribution of up to 10% of your account balance after<br />
one calendar month and the remainder after three months.<br />
If you start receiving distributions (except for a rollover) from your account, taxes will be required to be<br />
paid. Consult your tax advisor or call the My<strong>FRS</strong> Financial Guidance Line and speak to one of the<br />
financial planners before you make a decision about taking a distribution. See “What taxes are<br />
payable on distributions” for further information on this subject.<br />
You are not required to begin receiving your benefits at termination of employment but can defer<br />
receiving them until a later date. You must start withdrawing at least a minimum amount, known as a<br />
Required Minimum Distribution (RMD), from your <strong>FRS</strong> <strong>Investment</strong> <strong>Plan</strong> account no later than<br />
December 31 of the calendar year during which you reach age 70½ or terminate employment. The<br />
RMD for any year after the year you turn 70½ must be made by December 31 of that later year. For<br />
example, you reach age 70½ on August 20, 2010. For 2010, you must receive the RMD from your<br />
retirement account by December 31, 2010, unless you defer this payment to April 1 of the following<br />
year.<br />
The RMD, which changes yearly, is calculated based on your current age and your account balance at<br />
the end of the previous year. Any distributions you receive for the year must equal or exceed the<br />
RMD. An additional benefit payment will be sent to you in December of any year in which your total<br />
payments for that year do not equal or exceed your RMD.<br />
If you are paid a federally mandated RMD from the <strong>FRS</strong> <strong>Investment</strong> <strong>Plan</strong>, you will not be considered a<br />
retiree nor will you lose any unvested service credit. If you receive an RMD and return to <strong>FRS</strong> covered<br />
25<br />
The My<strong>FRS</strong> Financial Guidance Program — Use It No Matter Which <strong>Plan</strong> You Choose<br />
Phone: My<strong>FRS</strong> Financial Guidance Line: 1-866-446-9377 (TTY: 1-888-429-2160) •<br />
Online: My<strong>FRS</strong>.com • Retirement and Financial <strong>Plan</strong>ning Workshops offered in some locations
employment in the future, you will be placed back in the <strong>FRS</strong> <strong>Investment</strong> <strong>Plan</strong> and earn additional<br />
service credit.<br />
Note: The Worker, Retiree, and Employer Recovery Act of 2008 suspended the payout of RMD’s for<br />
calendar year 2009.<br />
You may receive payment as:<br />
<br />
<br />
<br />
<br />
Partial or full lump-sum distribution.<br />
Partial or full lump-sum direct rollover distribution to an IRA, Roth IRA, 401(k), 403(b), 457, or<br />
other qualified retirement plan that accepts rollover contributions. A rollover is a tax-free<br />
transfer from one eligible retirement plan to another.<br />
A split distributionpart direct rollover and part payable to you.<br />
Periodic distributions from your account balance.<br />
Or you can use some or all of your account to buy monthly lifetime annuity payments guaranteed by<br />
an insurance firm (currently The Hartford Life Insurance Company) contracted with the SBA. Using<br />
this annuity option, you can provide for joint benefits or survivor benefits. These payments may include<br />
survivor benefit options and a 3% annual benefit increase option similar to those found in the <strong>FRS</strong><br />
Pension <strong>Plan</strong>.<br />
You must call the <strong>Investment</strong> <strong>Plan</strong> Administrator or log in to My<strong>FRS</strong>.com to request a distribution and<br />
to designate the type of distribution you wish to take. In addition, you must call the <strong>Investment</strong> <strong>Plan</strong><br />
Administrator or log in to My<strong>FRS</strong>.com to request a roll over of your account balance to another eligible<br />
retirement plan. To get guidance to properly carry out your wishes, contact the My<strong>FRS</strong> Financial<br />
Guidance Line toll-free at 1-866-446-9377 (TTY: 1-888-429-2160). Before a distribution is made to<br />
you, further information regarding plan distributions will be provided to you. Since tax consequences<br />
may be severe if you make certain distribution choices, you may want to consult a professional tax<br />
adviser before making your distribution election if you do not plan to call the <strong>Investment</strong> <strong>Plan</strong><br />
Administrator.<br />
Distributions will be based on your account balance at the close of business on the day the request is<br />
made, provided the request is completed by 4 p.m. Eastern time. If the distribution is requested after 4<br />
p.m. Eastern time or on a non-business day, the distribution amount will be based on your account<br />
balance at the close of business the next business day the financial markets are open.<br />
If your account balance at termination is a de minimis amount as determined by the SBA, it could be<br />
subject to an automatic distribution. A de minimis amount has been set for accounts with vested<br />
balances of $1,000 or less. No distribution will be made, however, until you have been terminated<br />
from all employment with <strong>FRS</strong>-covered employers for at least six calendar months. A de minimis<br />
distribution will be either a complete lump-sum liquidation of your account, subject to the provisions of<br />
the Internal Revenue Code, or if you provide affirmative instructions, a lump-sum direct rollover<br />
distribution paid directly to the custodian of an eligible retirement plan on your behalf. If you return to<br />
<strong>FRS</strong>-covered employment after receiving a de minimis distribution, you are not considered a<br />
reemployed retiree and will not be subject to the limitations applicable to such employees.<br />
Once you have taken a distribution from your <strong>Investment</strong> <strong>Plan</strong> account, the check for the amount of<br />
the distribution is payable for 180 days. If the check is not cashed or deposited within 180 days it<br />
becomes a stale-dated check and is canceled and placed in a suspense account. The <strong>Investment</strong><br />
<strong>Plan</strong> Administrator will endeavor to find the payee for up to 10 years using various methods. If the<br />
payee is not found during the 10-year period, the amount of the check is forfeited and used to pay plan<br />
expenses of the <strong>Investment</strong> <strong>Plan</strong>. Once the check is distributed, no interest earnings will be credited<br />
26<br />
The My<strong>FRS</strong> Financial Guidance Program — Use It No Matter Which <strong>Plan</strong> You Choose<br />
Phone: My<strong>FRS</strong> Financial Guidance Line: 1-866-446-9377 (TTY: 1-888-429-2160) •<br />
Online: My<strong>FRS</strong>.com • Retirement and Financial <strong>Plan</strong>ning Workshops offered in some locations
to the member or payee. All interest earnings on stale dated checks are deposited in the <strong>Investment</strong><br />
<strong>Plan</strong> and used to pay administrative expenses of the plan.<br />
Caution: Your eligibility to continue your current health insurance coverage with your employer may<br />
be affected if you take a distribution from your <strong>Investment</strong> <strong>Plan</strong> account. Before taking any distribution<br />
from your <strong>Investment</strong> <strong>Plan</strong> account, be sure to contact your employer’s personnel office to verify your<br />
eligibility to continue this very important coverage.<br />
Reference:<br />
Sections 110.123(g), 112.0801(2), 121.4501(2)(j) and (7), and 121.591, F.S.<br />
Sections 19-11.003, 12.006, and 13.004(12), F.A.C.<br />
What taxes are payable on distributions<br />
If you choose to receive payment of your distribution as a single lump sum, the taxable portion will be<br />
subject to federal taxes in the year the distribution is made.<br />
If you elect to roll over all or part of your distribution, the portion rolled over will not be taxed until you<br />
take it out of the eligible plan. Any amounts eligible for rollover but paid directly to you will have a<br />
mandatory 20 percent federal income tax withheld from the distribution (exceptions apply). Any<br />
amount directly rolled over to another employer’s plan or to an IRA will not be subject to the mandatory<br />
20 percent federal income tax withholding.<br />
If you are under age 59½ when you receive a distribution there will be an additional 10 percent federal<br />
tax penalty on the taxable portion of your distribution. The 10 percent tax penalty may not apply if you<br />
meet one of the exceptions permitted under the Internal Revenue Code such as death, total and<br />
permanent disability, separation from service in the year you turn age 55 or older, or distribution<br />
according to a Qualified Domestic Relations Order (QDRO). The penalty also does not apply to<br />
distributions made as part of a series of substantially equal, periodic payments (at least annual)<br />
throughout your life or life expectancy or the joint lives or joint life expectancies of you and your<br />
beneficiary if the payment begins after your separation from service.<br />
Reference:<br />
Sections 121.4501(7) and 121.591, F.S.<br />
Section 19-12.006, F.A.C.<br />
What charges are assessed on accounts in the <strong>FRS</strong> <strong>Investment</strong> <strong>Plan</strong><br />
If you are an active employee of an <strong>FRS</strong>-covered employer, you will pay investment management fees<br />
on your <strong>FRS</strong> <strong>Investment</strong> <strong>Plan</strong> account as imposed by the investment managers of the funds you have<br />
chosen to invest in. Florida law also allows the imposition of fees for administration and education<br />
services, but these are not presently charged to active-employee members.<br />
If you have terminated or retired from <strong>FRS</strong> employment (including former DROP participants who have<br />
rolled funds into the <strong>Investment</strong> <strong>Plan</strong>) but have retained your account in the <strong>FRS</strong> <strong>Investment</strong> <strong>Plan</strong>, you<br />
will continue to pay the investment management fees on your <strong>FRS</strong> <strong>Investment</strong> <strong>Plan</strong> funds.<br />
Additionally, there is an administrative maintenance fee of $6 per quarter for all account balances over<br />
$1,000. This amount will be automatically deducted from your account each quarter.<br />
If you are a divorced spouse of an <strong>FRS</strong> <strong>Investment</strong> <strong>Plan</strong> member and you have your own account<br />
because of a court-ordered qualified domestic relations order, you will pay the same investment<br />
27<br />
The My<strong>FRS</strong> Financial Guidance Program — Use It No Matter Which <strong>Plan</strong> You Choose<br />
Phone: My<strong>FRS</strong> Financial Guidance Line: 1-866-446-9377 (TTY: 1-888-429-2160) •<br />
Online: My<strong>FRS</strong>.com • Retirement and Financial <strong>Plan</strong>ning Workshops offered in some locations
management fees (and any administrative fee) as terminated or retired members. Surviving<br />
beneficiaries are also subject to these fees.<br />
Note that the procedures regarding determining whether a domestic relations order is a qualified<br />
domestic relations order are available at no charge by calling the My<strong>FRS</strong> Financial Guidance Line at<br />
1-866-446-9377 (TTY: 1-888-429-2160), Option 4.<br />
Charges and fees assessed against <strong>Investment</strong> <strong>Plan</strong> accounts may change at any time without prior<br />
notice to members or <strong>FRS</strong> employers. Fees and expenses are only one of several factors that you<br />
should consider when making investment decisions.<br />
Reference:<br />
Sections 121.4501(6)(a) and (11), 121.74, and 121.77, F.S.<br />
Sections 19-11.006(4)(c)5.e. and 19-11.007(4)(d)5.b., F.A.C.<br />
THE SECOND ELECTION<br />
<strong>FRS</strong> members have a one-time option, called “second election”, to change their retirement plan while<br />
actively employed by an <strong>FRS</strong>-covered employer. This Second Election is codified in Section<br />
121.4501(4)(e), Florida Statutes. It is available to new employees after their initial retirement plan<br />
Enrollment Period ends or during the month of their retirement plan effective date if they make an<br />
active election sooner. To use your second election you must be actively employed earning salary<br />
and service credit when your 2 nd Election Retirement <strong>Plan</strong> Enrollment Form is received by the <strong>FRS</strong><br />
<strong>Plan</strong> Choice Administrator. If you are on an unpaid leave of absence, or have terminated your <strong>FRS</strong>covered<br />
employment, you are not eligible to use your second election. If you are leaving <strong>FRS</strong>-covered<br />
employment, this form must be received prior to your termination date. If it is subsequently determined<br />
that you were not eligible to make a plan choice, your election will be considered invalid and will be<br />
reversed.<br />
If you work for an educational institution (school board, community college, university, etc.) on a work<br />
contract which is fewer than 12 months, you may not make a valid second election to transfer from the<br />
Pension <strong>Plan</strong> to the <strong>Investment</strong> <strong>Plan</strong> (or vice versa) if you are not employed in specific months during<br />
the summer.<br />
If you were an existing employee during the initial implementation of the <strong>Investment</strong> <strong>Plan</strong> and chose to<br />
remain in the <strong>FRS</strong> Pension <strong>Plan</strong> or if you are a newly hired employee who chose to remain in the <strong>FRS</strong><br />
Pension <strong>Plan</strong>, you have a one-time option to change to the <strong>FRS</strong> <strong>Investment</strong> <strong>Plan</strong>. If you are changing<br />
from the Pension <strong>Plan</strong> to the <strong>Investment</strong> <strong>Plan</strong> you can make your second election online by logging<br />
into My<strong>FRS</strong>.com.<br />
If you elected to participate in the <strong>FRS</strong> <strong>Investment</strong> <strong>Plan</strong> during your initial retirement plan choice<br />
period, you will have a one-time opportunity to change to the <strong>FRS</strong> Pension <strong>Plan</strong> at any point while<br />
working for an <strong>FRS</strong> employer.<br />
<strong>Investment</strong> <strong>Plan</strong> to Pension <strong>Plan</strong><br />
If you decide to change to the <strong>FRS</strong> Pension <strong>Plan</strong>, you must “buy” into the <strong>FRS</strong> Pension <strong>Plan</strong> with the<br />
money in your <strong>FRS</strong> <strong>Investment</strong> <strong>Plan</strong> account. If you don’t have sufficient funds in your <strong>FRS</strong><br />
<strong>Investment</strong> <strong>Plan</strong> account, you can still get back into the <strong>FRS</strong> Pension <strong>Plan</strong>, but you must make up the<br />
difference from your other financial resources. You may be able to rollover funds from another eligible<br />
retirement plan to pay the difference (call the My<strong>FRS</strong> Financial Guidance Line for further information).<br />
28<br />
The My<strong>FRS</strong> Financial Guidance Program — Use It No Matter Which <strong>Plan</strong> You Choose<br />
Phone: My<strong>FRS</strong> Financial Guidance Line: 1-866-446-9377 (TTY: 1-888-429-2160) •<br />
Online: My<strong>FRS</strong>.com • Retirement and Financial <strong>Plan</strong>ning Workshops offered in some locations
If you have a surplus remaining in your <strong>FRS</strong> <strong>Investment</strong> <strong>Plan</strong> account after the “buy-in”, you will<br />
continue to have access to the account to manage the assets. This account will be available for<br />
distribution once you retire and begin receiving your <strong>FRS</strong> Pension <strong>Plan</strong> benefit.<br />
CAUTION: Please be aware that the out-of-pocket cost to “buy-in” to the Pension <strong>Plan</strong> may be a<br />
significant amount and you may not have sufficient funds in your <strong>FRS</strong> <strong>Investment</strong> <strong>Plan</strong> account to<br />
cover the total cost. If you are a new hire and elect the <strong>Investment</strong> <strong>Plan</strong> initially with the strategy of<br />
using your second election at a later date to switch to the Pension <strong>Plan</strong>, either once you attain 6 years<br />
of <strong>FRS</strong> service or upon realizing that you want to work a full career with the <strong>FRS</strong>, understand that you<br />
may not be able to afford to make this election. That is why it is so important that you select the right<br />
retirement plan initially when using your first election.<br />
The <strong>FRS</strong> will calculate your buy-in cost, based on whether you had previous <strong>FRS</strong> Pension <strong>Plan</strong><br />
service before joining the <strong>Investment</strong> <strong>Plan</strong>, as follows:<br />
<br />
<br />
If you had previous <strong>FRS</strong> Pension <strong>Plan</strong> service and you changed from the <strong>FRS</strong> Pension <strong>Plan</strong><br />
to the <strong>FRS</strong> <strong>Investment</strong> <strong>Plan</strong> during your initial enrollment period, you can switch back to the<br />
<strong>FRS</strong> Pension <strong>Plan</strong> by paying the buy-in amount. This amount, which is called a Return<br />
Accumulated Benefit Obligation (ABO), is a present value calculation that assumes that all of<br />
your <strong>FRS</strong> creditable service up to that point has been earned in the <strong>FRS</strong> Pension <strong>Plan</strong>. If you<br />
elect this option and your <strong>FRS</strong> <strong>Investment</strong> <strong>Plan</strong> account balance is greater than the required<br />
buy-in amount, you will keep the difference in your <strong>FRS</strong> <strong>Investment</strong> <strong>Plan</strong> account. If your <strong>FRS</strong><br />
<strong>Investment</strong> <strong>Plan</strong> account balance is less than the required buy-in amount, you will have to<br />
make up the difference from your other financial resources.<br />
If you had no previous <strong>FRS</strong> Pension <strong>Plan</strong> service and joined the <strong>FRS</strong> <strong>Investment</strong> <strong>Plan</strong> as<br />
a new employee, you can switch to the <strong>FRS</strong> Pension <strong>Plan</strong> by paying the Actuarial Accrued<br />
Liability (AAL) or total cost of the accumulated <strong>FRS</strong> Pension <strong>Plan</strong> benefit. If you elect this<br />
option and your <strong>FRS</strong> <strong>Investment</strong> <strong>Plan</strong> account is greater than the required AAL, you will retain<br />
the difference in your <strong>FRS</strong> <strong>Investment</strong> <strong>Plan</strong> account, but will be a member of the <strong>FRS</strong> Pension<br />
<strong>Plan</strong>. If your <strong>FRS</strong> <strong>Investment</strong> <strong>Plan</strong> account is less than the required AAL, you must make up<br />
the difference from your other financial resources.<br />
If you had previous <strong>FRS</strong> Pension <strong>Plan</strong> service, the Second Choice Service on My<strong>FRS</strong>.com can help<br />
you estimate your buy-in amount. Or, you can call the My<strong>FRS</strong> Financial Guidance Line at 1-866-446-<br />
9377 (TTY: 1-888-429-2160). The Division of Retirement will calculate the estimated buy-in amount<br />
you may owe, which you may request before making the election to join the Pension <strong>Plan</strong>. This<br />
amount changes (i.e., typically increases) at the beginning of each month to reflect your new age and<br />
service. Once you have the buy-in amount calculated by the Division of Retirement, you must submit<br />
a 2 nd Election Retirement <strong>Plan</strong> Enrollment Form to lock in the buy-in amount as of the month<br />
calculated by the Division of Retirement. If you do not submit the 2 nd Election Retirement <strong>Plan</strong><br />
Enrollment Form prior to the end of that month, a new buy-in amount must be calculated by the<br />
Division of Retirement based on the new buy-in month. You may obtain the form by calling the<br />
My<strong>FRS</strong> Financial Guidance Line at 1-866-446-9377 (TTY: 1-888-429-2160), or you can obtain the<br />
form online at My<strong>FRS</strong>.com. After you make your election, the Division of Retirement will calculate the<br />
final buy-in cost once all employer payrolls for periods prior to your transfer date have posted. This<br />
may necessitate an increase or decrease in the estimated amount you owe for the buy-in. If you owe<br />
less, you will receive a credit to your <strong>Investment</strong> <strong>Plan</strong> account. If you owe more, you will receive an<br />
invoice from the Division. If you do not remit the buy-in payment within 60 days of the date of the<br />
invoice, your second election will be voided. You will retain your second election option. The amount<br />
of <strong>Investment</strong> <strong>Plan</strong> assets that were liquidated will be returned to your <strong>Investment</strong> <strong>Plan</strong> account and<br />
29<br />
The My<strong>FRS</strong> Financial Guidance Program — Use It No Matter Which <strong>Plan</strong> You Choose<br />
Phone: My<strong>FRS</strong> Financial Guidance Line: 1-866-446-9377 (TTY: 1-888-429-2160) •<br />
Online: My<strong>FRS</strong>.com • Retirement and Financial <strong>Plan</strong>ning Workshops offered in some locations
einvested at current market value. The <strong>FRS</strong> is not responsible for market gains or losses to your<br />
account during the liquidation process.<br />
Note that you have the ability to move your <strong>FRS</strong> <strong>Investment</strong> <strong>Plan</strong> account balance into conservative<br />
investment options within the <strong>FRS</strong> <strong>Investment</strong> <strong>Plan</strong> in order to potentially reduce the volatility of your<br />
account balance prior to liquidation and movement to the <strong>FRS</strong> Pension <strong>Plan</strong>.<br />
Pension <strong>Plan</strong> to <strong>Investment</strong> <strong>Plan</strong><br />
If you join the <strong>FRS</strong> Pension <strong>Plan</strong> and wish to change to the <strong>FRS</strong> <strong>Investment</strong> <strong>Plan</strong> at a later date, there<br />
will be no cost for the change. Your Accumulated Benefit Obligation (ABO) in the <strong>FRS</strong> Pension <strong>Plan</strong><br />
will be transferred to the <strong>Investment</strong> <strong>Plan</strong> as your opening account balance.<br />
Vesting Caution: The ABO transferred from the <strong>FRS</strong> Pension <strong>Plan</strong> to the <strong>FRS</strong> <strong>Investment</strong> <strong>Plan</strong><br />
requires 6 years of service for vesting.<br />
If you wish to use your Second Election, note that the plan change is effective the first day of the<br />
month following the receipt and processing of your 2 nd Election Retirement <strong>Plan</strong> Enrollment Form by<br />
the <strong>FRS</strong> <strong>Plan</strong> Choice Administrator. You must be actively employed earning salary and service credit<br />
when your 2 nd Election Retirement <strong>Plan</strong> Enrollment Form is received by the <strong>FRS</strong> <strong>Plan</strong> Choice<br />
Administrator. If you are on an unpaid leave of absence, or have terminated your <strong>FRS</strong>-covered<br />
employment, you are not eligible to use your Second Election. Your 2 nd Election Retirement <strong>Plan</strong><br />
Enrollment Form must be received by the <strong>Plan</strong> Choice Administrator prior to your termination. If<br />
received after your termination it will be considered late and your plan change will be rejected. For<br />
example, if you submit your 2 nd Election Retirement <strong>Plan</strong> Enrollment Form in December and it is<br />
received and processed by the <strong>Plan</strong> Choice Administrator on December 15, your plan change will be<br />
effective on January 1. You may terminate employment any time after December 15. However, if you<br />
terminate employment on December 5 prior to the receipt and processing of the Enrollment Form, it<br />
will be rejected or reversed and you will remain in your original retirement plan.<br />
NOTE: Lump sum leave payments made after you terminate your employment do not meet the<br />
employment requirements. For example, if your 2 nd Election Retirement <strong>Plan</strong> Enrollment Form<br />
is received and processed by the <strong>Plan</strong> Choice Administrator on December 15, you cannot<br />
terminate employment December 5, and utilize lump sum leave payments made to you in<br />
December or January to meet the requirements described above. Additionally, if you are on an<br />
unpaid leave of absence, you are not eligible to make a second election. For example, if you<br />
are on an unpaid leave of absence on May 15 and you submit your 2 nd Election Retirement<br />
<strong>Plan</strong> Enrollment Form, your election will be rejected, since you are not considered an active<br />
employee. You must return to active employment earning salary and retirement service credit<br />
before being eligible to use your second election.<br />
Note: Under certain circumstances, you may be able to cancel a retirement plan election. See “Can I<br />
cancel a retirement plan election once it has been made” for further information.<br />
Reference:<br />
Section 121.4501(4)(e), F.S.<br />
Sections 19-11.007 and 13.002, F.A.C.<br />
If I want to use my second election to change from to the <strong>FRS</strong> <strong>Investment</strong> <strong>Plan</strong> to the<br />
<strong>FRS</strong> Pension <strong>Plan</strong>, how will the buy-in amount be determined<br />
As indicated above, the calculation used to determine the buy-in amount differs depending on whether<br />
or not you had previous <strong>FRS</strong> Pension <strong>Plan</strong> service at the time you changed from the <strong>FRS</strong> Pension<br />
30<br />
The My<strong>FRS</strong> Financial Guidance Program — Use It No Matter Which <strong>Plan</strong> You Choose<br />
Phone: My<strong>FRS</strong> Financial Guidance Line: 1-866-446-9377 (TTY: 1-888-429-2160) •<br />
Online: My<strong>FRS</strong>.com • Retirement and Financial <strong>Plan</strong>ning Workshops offered in some locations
<strong>Plan</strong> to the <strong>FRS</strong> <strong>Investment</strong> <strong>Plan</strong> during your initial enrollment period. In the following example, we<br />
are assuming you had previous <strong>FRS</strong> Pension <strong>Plan</strong> service.<br />
The Division of Retirement will calculate a Return Accumulated Benefit Obligation (ABO), using a<br />
formula developed by the Pension <strong>Plan</strong>'s actuary, in accordance with Florida law. The ABO is a<br />
present value calculation that assumes that all of your <strong>FRS</strong> creditable service up to that point has been<br />
earned in the <strong>FRS</strong> Pension <strong>Plan</strong>. The formula to compute the ABO is:<br />
Years of<br />
Creditable<br />
Service<br />
X<br />
Percentage Value (depends<br />
on class of <strong>FRS</strong><br />
membership: 1.6% for<br />
Regular Class)<br />
X<br />
Average Final Compensation<br />
(average of highest 5 years<br />
of salary)<br />
= Yearly Benefit<br />
at Normal<br />
Retirement<br />
Date<br />
The total yearly benefits collected during retirement are projected over your expected lifetime<br />
(including a 3% annual increase in benefits). This stream of increasing annual payments is converted<br />
to a single lump sum – a "present value" (value in today's dollars) using an actuarial conversion factor.<br />
The conversion factor reflects a 7.75 percent interest rate and mortality tables specified by Florida<br />
Statutes. Please note that the conversion factor will increase monthly until you reach your normal<br />
retirement date and will decrease for each month after the normal retirement date.<br />
Example: Let's say an employee is age 53 and has 9.33 years of Regular Class <strong>FRS</strong> service (3.50<br />
years in the <strong>FRS</strong> Pension <strong>Plan</strong> and 5.83 years in the <strong>FRS</strong> <strong>Investment</strong> <strong>Plan</strong>). The employee's normal<br />
retirement age will be 62 for his/her class of membership.<br />
The employee's earnings for the highest five fiscal years are $24,932, $25,338, $27,195, $27,950, and<br />
$28,246. So the employee's Average Final Compensation is the average of these numbers, or<br />
$26,732.<br />
9.33<br />
Years of<br />
Creditable Service<br />
X 1.6%<br />
Percentage<br />
Value<br />
X $26,732<br />
Average Final<br />
Compensation<br />
= $3,991<br />
Yearly Benefit at Normal Retirement<br />
Date<br />
$3,991<br />
Yearly Benefit<br />
X 6.5849<br />
Conversion Factor<br />
(determined by actuary)<br />
= $26,281 5<br />
Return Accumulated Benefit Obligation (Buyin<br />
Amount)<br />
Because the buy-in amount of $26,281 is greater than the employee’s current <strong>FRS</strong> <strong>Investment</strong> <strong>Plan</strong><br />
account balance of $25,386, the employee must pay the $895 difference from other financial<br />
resources in order to get back in the <strong>FRS</strong> Pension <strong>Plan</strong>.<br />
Reference:<br />
Sections 121.4501(4)(e), F.S.<br />
Sections 19-11.007(4)(a)1. and (h), F.A.C.<br />
5 Dollar amounts are rounded to the nearest whole dollar.<br />
31<br />
The My<strong>FRS</strong> Financial Guidance Program — Use It No Matter Which <strong>Plan</strong> You Choose<br />
Phone: My<strong>FRS</strong> Financial Guidance Line: 1-866-446-9377 (TTY: 1-888-429-2160) •<br />
Online: My<strong>FRS</strong>.com • Retirement and Financial <strong>Plan</strong>ning Workshops offered in some locations
BENEFITS<br />
Disability benefits<br />
To qualify for disability retirement benefits, you must be totally and permanently disabled, and your<br />
injury or illness must have occurred before you terminated employment. If you are a retiree with<br />
renewed membership in the <strong>FRS</strong> <strong>Investment</strong> <strong>Plan</strong>, you are not eligible for disability benefits.<br />
As a member of the <strong>FRS</strong> <strong>Investment</strong> <strong>Plan</strong>, if you become disabled and are approved by the Division of<br />
Retirement to receive benefits from the <strong>FRS</strong>, your <strong>FRS</strong> <strong>Investment</strong> <strong>Plan</strong> account balance will be<br />
transferred to the <strong>FRS</strong> Pension <strong>Plan</strong> Trust Fund and you will receive disability benefits under the<br />
provisions of the <strong>FRS</strong> Pension <strong>Plan</strong>. You are not required to use your one-time Second Election to<br />
change to the <strong>FRS</strong> Pension <strong>Plan</strong>. Disability benefits are not reduced for early retirement. If you<br />
should die while receiving disability benefits, your beneficiary may receive a continuing monthly benefit<br />
if you selected a retirement option which provides this. If you recover from your disability, you will be<br />
transferred back to the <strong>FRS</strong> <strong>Investment</strong> <strong>Plan</strong> along with any remaining account balance, plus earnings,<br />
you have not drawn in retirement benefits.<br />
As an alternative to receiving disability benefits from the <strong>FRS</strong> Pension <strong>Plan</strong>, you may elect to continue<br />
your participation in the <strong>FRS</strong> <strong>Investment</strong> <strong>Plan</strong> and take a distribution of your account balance under<br />
any of the methods provided in the <strong>Plan</strong>.<br />
Two types of disability benefits are payable under the <strong>FRS</strong>:<br />
<br />
<br />
Regular Disability Benefits - To qualify for regular disability retirement, you must complete at<br />
least 8 years of creditable service. If approved by the Division of Retirement, your option 1<br />
annual benefit will be at least 25 percent of your average final compensation. If your actual<br />
earned benefit, based on your years of service, would be higher than the 25 percent minimum<br />
disability benefit, the higher amount will be paid.<br />
In-Line-of-Duty Disability Benefits - You are covered for in-line-of-duty disability beginning<br />
on your first day of covered <strong>FRS</strong> employment. Your in-line-of-duty disability must be caused by<br />
injury or illness that happens in the actual performance of duties as required by your job. The<br />
minimum yearly benefit paid under option 1 for this type of disability is 42 percent (65 percent<br />
for Special Risk) of your average final compensation. If your actual earned benefit, based on<br />
your years of service, would be higher than the 42 percent (65 percent for Special Risk), the<br />
higher benefit amount will be paid.<br />
Certain <strong>FRS</strong> members may be entitled to a presumption that they were disabled in-the-line-of-duty:<br />
Firefighters, law enforcement officers and correctional officers disabled due to heart disease,<br />
hypertension or tuberculosis.<br />
Firefighters, paramedics, emergency medical technicians, law enforcement officers and<br />
correctional officers disabled due to hepatitis, meningococcal meningitis, or tuberculosis.<br />
Reference:<br />
Sections 121.091(4), 121.4501(16), and 121.591(2), F.S.<br />
Section 19-13.002, F.A.C.<br />
32<br />
The My<strong>FRS</strong> Financial Guidance Program — Use It No Matter Which <strong>Plan</strong> You Choose<br />
Phone: My<strong>FRS</strong> Financial Guidance Line: 1-866-446-9377 (TTY: 1-888-429-2160) •<br />
Online: My<strong>FRS</strong>.com • Retirement and Financial <strong>Plan</strong>ning Workshops offered in some locations
Death benefits<br />
If you die at any time after becoming vested but before you’ve retired and taken a distribution, your<br />
beneficiary is entitled to receive the full value of your vested account balance. If your spouse is your<br />
beneficiary, your spouse may receive your account balance under any of the options available to you<br />
as a member of the <strong>Investment</strong> <strong>Plan</strong>. If your beneficiary is not your spouse, your beneficiary must<br />
decide within one year how to take a distribution from your account. The account must be paid out<br />
within 5 years, unless your beneficiary takes a distribution over their lifetime (lifetime annuity). There<br />
are no separate death benefits if you die in the line of duty as provided in the Pension <strong>Plan</strong>. Any<br />
required withholding tax will be remitted to the Internal Revenue Service (IRS) at the time of the<br />
distribution to your beneficiary. Your beneficiary may receive a distribution under the same options as<br />
provided for members, or defer receipt until some future date as permitted by IRS Rules. If deferring,<br />
the beneficiary should call the My<strong>FRS</strong> Financial Guidance Line to determine the limits of the deferral.<br />
If you die after you retire (take a distribution), your beneficiary is entitled to benefits based on the<br />
distribution option you selected. If you elected a lifetime annuity with a joint and survivor option, then<br />
your joint annuitant will continue to receive the specified portion of your benefit for the remainder of his<br />
or her lifetime. If you elected a lump sum payout, no additional survivor payments are available. If you<br />
elected to take a partial distribution from your account, your beneficiary will be entitled to receive the<br />
remaining account balance.<br />
Your beneficiary is entitled to free <strong>FRS</strong> Survivor Financial Counseling upon your death. This service is<br />
designed to provide your beneficiary with access to Ernst & Young financial planning professionals<br />
who are sensitive to your beneficiary’s circumstances and unique financial concerns.<br />
Reference:<br />
Sections 121.4501(20) and 121.591(3), F.S.<br />
Sections 19-11.003(4) and (5), and 12.006, F.A.C.<br />
Health Insurance Subsidy (HIS)<br />
The HIS is a supplementary benefit paid to help pay the cost of your health insurance premiums. The<br />
HIS is only available after attaining six years of service. To be eligible to receive the HIS under the<br />
<strong>FRS</strong> <strong>Investment</strong> <strong>Plan</strong>, you must meet the normal retirement age or service requirements of the <strong>FRS</strong><br />
Pension <strong>Plan</strong> for your class of membership and provide proper documentation certifying that you have<br />
health insurance coverage. For example, a Regular Class member must be either age 62 and have 6<br />
years of service or have a total of 30 years of service, and a Special Risk member must be either age<br />
55 with 6 years or have a total of 25 years of service.<br />
If you leave <strong>FRS</strong>-covered employment and take a benefit distribution prior to meeting the normal<br />
retirement requirements, you must wait until you reach normal retirement age to begin receiving your<br />
HIS benefit. If you elect the <strong>FRS</strong> <strong>Investment</strong> <strong>Plan</strong> Hybrid Option, you will receive your HIS payment<br />
once you begin receiving your <strong>FRS</strong> Pension <strong>Plan</strong> benefit.<br />
The HIS subsidy, which is paid monthly, is $5 for each year of creditable service, with a minimum HIS<br />
of $30 per month and a maximum HIS of $150 per month.<br />
If you die, your spouse, if any, at the time of death will be entitled to receive your HIS benefit. It is not<br />
available to any other beneficiary.<br />
These requirements and amounts are enacted by the Florida Legislature and are subject to change.<br />
33<br />
The My<strong>FRS</strong> Financial Guidance Program — Use It No Matter Which <strong>Plan</strong> You Choose<br />
Phone: My<strong>FRS</strong> Financial Guidance Line: 1-866-446-9377 (TTY: 1-888-429-2160) •<br />
Online: My<strong>FRS</strong>.com • Retirement and Financial <strong>Plan</strong>ning Workshops offered in some locations
Reference:<br />
Sections 112.363 and 121.4501(18), F.S.<br />
Section 19-13.002, F.A.C.<br />
Insurance coverage after retirement<br />
After you retire from the <strong>FRS</strong> <strong>Investment</strong> <strong>Plan</strong>, you may continue participating in your employer’s<br />
group health insurance plan. To be considered retired under the <strong>Investment</strong> <strong>Plan</strong>, you must meet one<br />
of the following requirements:<br />
Meet the age and service requirements to qualify for normal retirement 6 as set forth in s.<br />
121.021(29), Florida Statutes; or<br />
Attain age 59½ (as specified by s. 72(t)(2)(A)(i) of the Internal Revenue Code) with 6 years of<br />
creditable service.<br />
If you do not take a distribution and decide to defer your retirement, you will not be considered retired<br />
and may not be entitled to continue your employer-sponsored health insurance coverage. It may be<br />
possible for you to enroll in your employer-sponsored health insurance in the future if your employer<br />
conducts a special retiree open enrollment period or the health insurance plan allows coverage at<br />
deferred retirement.<br />
Each employer must decide how to provide health coverage for retirees within the broad guidelines of<br />
the law. This is an employer-by-employer decision. Please check with your employer for further<br />
details.<br />
Caution: Your eligibility to continue your current health insurance coverage with your employer may<br />
be affected if you take a distribution from your <strong>Investment</strong> <strong>Plan</strong> account. Before taking any distribution<br />
from your <strong>Investment</strong> <strong>Plan</strong> account, be sure to contact your employer’s personnel office to verify your<br />
eligibility to continue this very important coverage.<br />
Reference:<br />
Sections 110.123 and 112.0801, F.S.<br />
Do I forfeit my retirement benefits if I commit a crime<br />
If, prior to retirement, you commit a crime specified by Florida Statutes as requiring forfeiture of<br />
benefits and are found guilty, or enter a plea of guilty or nolo contendere, or your employment was<br />
terminated because of an admission to committing, aiding, or abetting a specified crime, retirement<br />
rights and benefits are forfeited (except for any portion of your <strong>Investment</strong> <strong>Plan</strong> account attributable to<br />
a refund of personal retirement contributions or deposits, if any were made to the plan when they were<br />
previously allowed). The forfeiture of benefits provision applies if a job-related felony offense as<br />
outlined below is committed:<br />
<br />
<br />
<br />
Committing, aiding or abetting an embezzlement of public funds or any grand theft from the<br />
employer;<br />
Committing bribery in connection with employment;<br />
Committing any other felony specified in Chapter 838, Florida Statutes, (bribery and misuse of<br />
public office), except ss. 838.15 and 838.16, Florida Statutes, (commercial bribes);<br />
6 Employees, other than those in the Special Risk Class, attain “normal retirement date” at age 62 with 6 years of creditable<br />
service or upon completion of 30 years of creditable service.<br />
34<br />
The My<strong>FRS</strong> Financial Guidance Program — Use It No Matter Which <strong>Plan</strong> You Choose<br />
Phone: My<strong>FRS</strong> Financial Guidance Line: 1-866-446-9377 (TTY: 1-888-429-2160) •<br />
Online: My<strong>FRS</strong>.com • Retirement and Financial <strong>Plan</strong>ning Workshops offered in some locations
Committing any felony with intent to defraud the public or the employer of the right to receive<br />
the faithful performance of duty, or receiving or attempting to receive profit or advantage for the<br />
participant or another person through the use of his or her position; or<br />
Committing an impeachable offense (applies to elected officials only).<br />
Convicted of committing any felony as defined in s. 800.04, Florida Statutes, against a victim<br />
younger than 16, or any felony defined in Chapter 794, Florida Statutes, against a victim<br />
younger than 18.<br />
See s. 112.3173, Florida Statutes, and s. 8, Article II of the State Constitution, for additional<br />
information. In addition to the crimes stated above, if a court of competent jurisdiction finds that you<br />
violated any state law against strikes by public employees, your benefits are forfeited.<br />
If your beneficiary is found to have intentionally killed you or procured your death, he or she forfeits all<br />
rights to retirement benefits. Any benefits payable would be paid as if the beneficiary died before the<br />
member.<br />
The Clerk of the Court, the Secretary of the Senate or the employer, as appropriate, must notify the<br />
Commission on Ethics if you are found guilty of (or otherwise responsible for), impeached, or<br />
terminated prior to retirement due to any of the above offenses. The Commission on Ethics will notify<br />
the Division of Retirement. Your benefits will be suspended subject to a hearing held by an<br />
administrative law judge of the Division of Administrative Hearings. The judge’s decision may be<br />
appealed to the applicable District Court of Appeal.<br />
Reference:<br />
Sections 112.3173 and 121.091(5), F.S.<br />
Section 19-11.008(3), F.A.C.<br />
35<br />
The My<strong>FRS</strong> Financial Guidance Program — Use It No Matter Which <strong>Plan</strong> You Choose<br />
Phone: My<strong>FRS</strong> Financial Guidance Line: 1-866-446-9377 (TTY: 1-888-429-2160) •<br />
Online: My<strong>FRS</strong>.com • Retirement and Financial <strong>Plan</strong>ning Workshops offered in some locations
COMPLAINT PROCEDURES<br />
Section 121.4501(9)(g)3., Florida Statutes, requires the SBA to establish “procedures to receive and<br />
resolve participant complaints against a provider or approved provider personnel, and, when<br />
appropriate, refer such complaints to the appropriate agency.”<br />
If you have a complaint against a provider such as an administrative, education or investment provider,<br />
the complaint procedures establish a sequence of events, which must be followed to allow for a proper<br />
understanding of the complaint and to allow for a complete investigation of the complaint. The<br />
complaint procedures also include the opportunity for a hearing pursuant to Chapter 120, Florida<br />
Statutes, which is Florida’s Administrative Procedure Act. Further, the complaint procedures state the<br />
opportunity to appeal the outcome of the hearing.<br />
These complaint procedures must also be used if the SBA or another entity makes a decision, which<br />
will reduce, suspend, or terminate your retirement benefits.<br />
These procedures are available at no charge as a separate document. To get a copy, please call the<br />
<strong>FRS</strong> <strong>Investment</strong> <strong>Plan</strong> Administrator, toll-free, at 1-866-446-9377 (TTY: 1-888-429-2160), Option 4.<br />
The procedures are also available online at My<strong>FRS</strong>.com.<br />
Reference:<br />
Section 121.4501(9)(g)3., F.S.<br />
Section 19-11.005, F.A.C.<br />
OTHER <strong>FRS</strong> INVESTMENT PLAN INFORMATION<br />
Can I cancel a retirement plan election once it has been made<br />
The SBA will consider, on a case-by-case basis whether an election will be voided, subject to the<br />
following requirements:<br />
<br />
<br />
If you elected the <strong>FRS</strong> <strong>Investment</strong> <strong>Plan</strong> or <strong>FRS</strong> Hybrid Option - You must notify the SBA, ING,<br />
Ernst & Young, or the Division of Retirement by telephone, email, or written correspondence<br />
that you want to cancel your election no later than the last business day of the month following<br />
the election month. For example, if you make your election on March 13 you must notify one of<br />
the above entities that you want to cancel your election prior to the last business day of April.<br />
If you actively elected the <strong>FRS</strong> Pension <strong>Plan</strong> - You must notify one of the above entities no<br />
later than the last business day of the month following the election month. Note that if you<br />
default into the <strong>FRS</strong> Pension <strong>Plan</strong> (i.e., do not make an active election during your election<br />
period) you cannot cancel this default election.<br />
If your request to void the election is made timely and the SBA agrees the election will be voided, you<br />
will be required to sign a release and return it to the SBA prior to the election being officially voided.<br />
Reference:<br />
Sections 19-11.006(6) and 11.007(6), F.A.C.<br />
36<br />
The My<strong>FRS</strong> Financial Guidance Program — Use It No Matter Which <strong>Plan</strong> You Choose<br />
Phone: My<strong>FRS</strong> Financial Guidance Line: 1-866-446-9377 (TTY: 1-888-429-2160) •<br />
Online: My<strong>FRS</strong>.com • Retirement and Financial <strong>Plan</strong>ning Workshops offered in some locations
Situations which may affect your <strong>FRS</strong> <strong>Investment</strong> <strong>Plan</strong> benefits<br />
The <strong>FRS</strong> <strong>Investment</strong> <strong>Plan</strong> is designed to provide you with income for your retirement. However, some<br />
situations could affect your benefits:<br />
<br />
<br />
<br />
If it is determined by the <strong>Investment</strong> <strong>Plan</strong> Administrator that you are not eligible to participate in<br />
the <strong>Investment</strong> <strong>Plan</strong>.<br />
If you terminated employment before becoming vested in the <strong>FRS</strong> <strong>Investment</strong> <strong>Plan</strong>, you will not<br />
receive any benefits from the plan. If you transferred your Accumulated Benefit Obligation from<br />
the <strong>FRS</strong> Pension <strong>Plan</strong> into the <strong>FRS</strong> <strong>Investment</strong> <strong>Plan</strong>, but you terminated employment before<br />
attaining the required six years to vest in the <strong>FRS</strong> Pension <strong>Plan</strong> portion of your account in the<br />
<strong>FRS</strong> <strong>Investment</strong> <strong>Plan</strong>, you will not be able to obtain a distribution of your <strong>FRS</strong> Pension <strong>Plan</strong><br />
benefits. However, you will be able to obtain your contributions and earnings on employer<br />
contributions made on your behalf if you have become vested in the <strong>FRS</strong> <strong>Investment</strong> <strong>Plan</strong> by<br />
working for one year. If you take a distribution of your <strong>FRS</strong> <strong>Investment</strong> <strong>Plan</strong> account, you will<br />
forfeit the non-vested amount you transferred from the <strong>FRS</strong> Pension <strong>Plan</strong>, plus earnings on<br />
that amount.<br />
If you do not apply for payments from the <strong>FRS</strong> <strong>Investment</strong> <strong>Plan</strong> before stated deadlines, or if<br />
you do not provide the information requested by the <strong>FRS</strong> <strong>Investment</strong> <strong>Plan</strong> Administrator (the<br />
SBA or one of its contracted partners), your payments may be delayed; or<br />
If your mailing address on file with the <strong>FRS</strong> <strong>Investment</strong> <strong>Plan</strong> Administrator is incorrect,<br />
payments from the <strong>FRS</strong> <strong>Investment</strong> <strong>Plan</strong> may be delayed. Additionally, you may not receive<br />
statements of your <strong>FRS</strong> <strong>Investment</strong> <strong>Plan</strong> account balance or other important notices. See<br />
“How do I update my mailing address or change my name in my <strong>FRS</strong> records” for further<br />
information on this subject.<br />
If you receive an invalid distribution from your <strong>FRS</strong> <strong>Investment</strong> <strong>Plan</strong> account or violate the<br />
reemployment after retirement provisions of the <strong>Investment</strong> <strong>Plan</strong>, you will be required to repay<br />
the amount received to the <strong>FRS</strong> <strong>Investment</strong> <strong>Plan</strong> within 90 days. Failure to do so could lead to<br />
your being declared retired from the <strong>FRS</strong> <strong>Investment</strong> <strong>Plan</strong>, or at the option of the <strong>Plan</strong><br />
Administrator, to administrative or legal action.<br />
Reference:<br />
Sections 121.051(9), 121.4501(2)(f), (2)(m), (3), (4), and (6), and 121.591(1)(a)5., F.S.<br />
Section 19-11.003, F.A.C.<br />
What is the process for amendments to the plan or for termination of the plan<br />
The 2000 Session of the Florida Legislature established the <strong>FRS</strong> <strong>Investment</strong> <strong>Plan</strong> with the intent to<br />
continue the <strong>Plan</strong> indefinitely.<br />
However, because future circumstances cannot be anticipated, the Florida Legislature may change all<br />
or any part of the <strong>FRS</strong> <strong>Investment</strong> <strong>Plan</strong>. Changes to the <strong>FRS</strong> <strong>Investment</strong> <strong>Plan</strong> may or may not apply<br />
to you.<br />
If the <strong>FRS</strong> <strong>Investment</strong> <strong>Plan</strong> should ever be terminated, you would become 100% vested in your<br />
employer contributions, including any attributable earnings, and be entitled to the full value of your<br />
<strong>FRS</strong> <strong>Investment</strong> <strong>Plan</strong> account as of the <strong>Plan</strong>’s termination date.<br />
37<br />
The My<strong>FRS</strong> Financial Guidance Program — Use It No Matter Which <strong>Plan</strong> You Choose<br />
Phone: My<strong>FRS</strong> Financial Guidance Line: 1-866-446-9377 (TTY: 1-888-429-2160) •<br />
Online: My<strong>FRS</strong>.com • Retirement and Financial <strong>Plan</strong>ning Workshops offered in some locations
If the Florida Legislature makes any significant legislative changes to the <strong>FRS</strong> <strong>Investment</strong> <strong>Plan</strong>, this<br />
document will be updated. However, the SBA has no obligation to update this document before<br />
changes in statute or rule are effective, or notify you personally of any changes to statute, rules or this<br />
document.<br />
Reference:<br />
Sections 121.4501(1), (6), (7) and (13), F.S.<br />
What is the policy regarding errors and incorrect or incomplete data<br />
Errors may sometimes occur in determining benefits provided by the <strong>FRS</strong> <strong>Investment</strong> <strong>Plan</strong>. This could<br />
be due to incorrect or incomplete data or for other reasons. If such an error is discovered, the <strong>FRS</strong><br />
<strong>Investment</strong> <strong>Plan</strong> Administrator and your employer reserve the right to correct it at any time, including<br />
after you terminate employment or take a distribution of your account balance. If you receive an<br />
overpayment as a result of an error, you will be notified of the amount and will be required to repay it<br />
either to the <strong>FRS</strong> or your employer, as applicable. If you have an underpayment you will receive an<br />
additional payment from the <strong>FRS</strong> <strong>Investment</strong> <strong>Plan</strong> Administrator.<br />
Reference:<br />
Sections 121.591(1)(a)5. and 121.78(3), F.S.<br />
Section 19-11.001, F.A.C.<br />
What are my rights regarding employment in the <strong>FRS</strong> <strong>Investment</strong> <strong>Plan</strong><br />
Participation in the <strong>FRS</strong> <strong>Investment</strong> <strong>Plan</strong> or any contributions to the <strong>FRS</strong> <strong>Investment</strong> <strong>Plan</strong> on your<br />
behalf, or any other part of <strong>FRS</strong> <strong>Investment</strong> <strong>Plan</strong> operation or administration does not give you the<br />
right to continued employment with any <strong>FRS</strong> employer.<br />
Reference:<br />
Section 121.051(5), F.S.<br />
What are my rights to assign benefits<br />
The benefits payable to you under the <strong>FRS</strong> <strong>Investment</strong> <strong>Plan</strong>, and any contributions accumulated under<br />
the <strong>Plan</strong>, are not subject to assignment, execution, attachment, or any legal process, except for a<br />
Qualified Domestic Relations Order (QDRO) issued by a court of competent jurisdiction, income<br />
deduction orders as provided in s. 61.1301, Florida Statutes, and federal income tax levies. Note that<br />
federal income tax levies will only be honored if you are eligible for a distribution.<br />
If you divorce or legally separate, the <strong>FRS</strong> <strong>Investment</strong> <strong>Plan</strong> may be required to follow the provisions of<br />
a QDRO that assigns part or all of your <strong>FRS</strong> <strong>Investment</strong> <strong>Plan</strong> account to a former spouse or for the<br />
support of your dependents.<br />
The <strong>FRS</strong> <strong>Investment</strong> <strong>Plan</strong> Administrator’s QDRO Administration determines whether a court order is a<br />
QDRO. You can obtain QDRO information from QDRO Administration at 1-904-791-2909. Model<br />
language is available to assist in the drafting of a QDRO that meets the requirements of federal law<br />
and the <strong>Plan</strong>’s provisions. This language is available on My<strong>FRS</strong>.com in the “Forms” and “Publications”<br />
sections.<br />
QDRO Administration will send you a notice if the <strong>Plan</strong> receives a court order that could affect your<br />
<strong>FRS</strong> <strong>Investment</strong> <strong>Plan</strong> account.<br />
38<br />
The My<strong>FRS</strong> Financial Guidance Program — Use It No Matter Which <strong>Plan</strong> You Choose<br />
Phone: My<strong>FRS</strong> Financial Guidance Line: 1-866-446-9377 (TTY: 1-888-429-2160) •<br />
Online: My<strong>FRS</strong>.com • Retirement and Financial <strong>Plan</strong>ning Workshops offered in some locations
Reference:<br />
Section 121.591(4), F.S.<br />
<strong>Investment</strong> <strong>Plan</strong> member records and public records law exemption<br />
The State Board of Administration of Florida (SBA) is responsible for maintaining member records<br />
relevant to the <strong>FRS</strong> <strong>Investment</strong> <strong>Plan</strong>. The Division of Retirement within the Florida Department of<br />
Management Services is responsible for maintaining agency and member records relevant to the <strong>FRS</strong><br />
Pension <strong>Plan</strong> and certain records for the <strong>FRS</strong> <strong>Investment</strong> <strong>Plan</strong>.<br />
All <strong>FRS</strong> <strong>Investment</strong> <strong>Plan</strong> member records are filed according to the member’s Social Security number.<br />
The SBA collects member Social Security numbers because it is imperative for the SBA to have the<br />
ability to identify <strong>Investment</strong> <strong>Plan</strong> members properly and definitively.<br />
Section 119.07(1), Florida Statutes, and s. 24(a), Article I of the State Constitution, permit the public to<br />
review any public record. Due to the sensitive nature of <strong>FRS</strong> <strong>Investment</strong> <strong>Plan</strong> member data, including<br />
account balances, asset allocation, etc., a public records exemption exists. Section 121.4501(19),<br />
Florida Statutes, prohibits the disclosure of personal identifying information (e.g., name, Social<br />
Security number, address, etc.) of <strong>FRS</strong> <strong>Investment</strong> <strong>Plan</strong> members.<br />
Reference:<br />
Section 121.4501(19), F.S.<br />
Section 19-13.001(12), F.A.C.<br />
39<br />
The My<strong>FRS</strong> Financial Guidance Program — Use It No Matter Which <strong>Plan</strong> You Choose<br />
Phone: My<strong>FRS</strong> Financial Guidance Line: 1-866-446-9377 (TTY: 1-888-429-2160) •<br />
Online: My<strong>FRS</strong>.com • Retirement and Financial <strong>Plan</strong>ning Workshops offered in some locations
RETIREMENT PLAN ROLL OVERS TO THE INVESTMENT PLAN<br />
Rollovers from Qualified Retirement <strong>Plan</strong>s<br />
<strong>FRS</strong> <strong>Investment</strong> <strong>Plan</strong> members are permitted to roll over eligible retirement monies from other<br />
qualified retirement plans (i.e., 401(k), traditional IRA, 403(b), 457 plans, etc.) into the <strong>FRS</strong> <strong>Investment</strong><br />
<strong>Plan</strong>. After-tax monies rolled over from an eligible plan should be indicated on your distribution<br />
statement from the previous plan. The distribution statement should include the distribution date and<br />
the eligible rollover amount, including a separate accounting of any after-tax monies included in the<br />
rollover amount. If you are uncertain as to whether your former retirement plan is eligible to be rolled<br />
over, call the My<strong>FRS</strong> Financial Guidance Line at 1-866-446-9377, Option 4, and one of the customer<br />
service representatives will help you make the determination.<br />
Note: Once you roll over eligible retirement monies into the <strong>FRS</strong> <strong>Investment</strong> <strong>Plan</strong>, you cannot receive<br />
any distributions of these funds (or your <strong>Investment</strong> <strong>Plan</strong> account balance) until you terminate<br />
employment for 3 calendar months. You may be eligible to receive a one-time distribution of up to<br />
10% of your <strong>Investment</strong> <strong>Plan</strong> account balance one calendar month following the month of your<br />
termination if you meet the normal retirement requirements for the <strong>FRS</strong> Pension <strong>Plan</strong>.<br />
DROP Rollovers<br />
Current and former DROP participants of the <strong>FRS</strong> Pension <strong>Plan</strong> may roll over their DROP<br />
accumulation into the <strong>FRS</strong> <strong>Investment</strong> <strong>Plan</strong> as one of the allowed vehicles for distribution. This option<br />
allows these <strong>FRS</strong> members to keep some or all of their DROP account balance in the <strong>FRS</strong> and take<br />
advantage of the investment products and distribution options of the <strong>Investment</strong> <strong>Plan</strong>. The minimum<br />
rollover amount must be more than $1,000. Additionally, the DROP participant will pay the investment<br />
management fees for the fund(s) in which he chooses to invest, plus an administrative maintenance<br />
fee of $6 per quarter, which will be automatically deducted from the DROP participant’s <strong>Investment</strong><br />
<strong>Plan</strong> account each quarter. DROP participants who use this option are subject to the benefits and<br />
provisions of the <strong>Investment</strong> <strong>Plan</strong> as outlined in this summary plan description.<br />
Note: Terminated DROP participants who roll their DROP accumulation into the <strong>FRS</strong> <strong>Investment</strong> <strong>Plan</strong><br />
have immediate distribution access to their DROP proceeds whether they are retired or return to <strong>FRS</strong>covered<br />
employment.<br />
Rollovers from Former <strong>Investment</strong> <strong>Plan</strong> Members<br />
Former <strong>FRS</strong> <strong>Investment</strong> <strong>Plan</strong> members (retirees) who terminated <strong>FRS</strong> employment and took a<br />
complete distribution from their <strong>Investment</strong> <strong>Plan</strong> account may roll eligible funds from other qualified<br />
retirement plans back into the <strong>FRS</strong> <strong>Investment</strong> <strong>Plan</strong>. The minimum rollover amount must be more<br />
than $1,000. Additionally, the retiree will pay the investment management fees for the fund(s) in which<br />
he chooses to invest, plus there is an administrative maintenance fee of $6 per quarter, which will be<br />
automatically deducted from the retiree’s account each quarter. Retirees who use this option are<br />
subject to the benefits and provisions of the <strong>Investment</strong> <strong>Plan</strong> as outlined in this summary plan<br />
description. Rolling funds back into the <strong>Investment</strong> <strong>Plan</strong> will not subject the retiree to the<br />
reemployment after retirement provisions.<br />
Note: Retirees who use this option will have immediate access to their rollover funds regardless of<br />
whether they return to <strong>FRS</strong>-covered employment in the future, subject to any applicable Internal<br />
Revenue Codes.<br />
40<br />
The My<strong>FRS</strong> Financial Guidance Program — Use It No Matter Which <strong>Plan</strong> You Choose<br />
Phone: My<strong>FRS</strong> Financial Guidance Line: 1-866-446-9377 (TTY: 1-888-429-2160) •<br />
Online: My<strong>FRS</strong>.com • Retirement and Financial <strong>Plan</strong>ning Workshops offered in some locations
Rollovers Not Permitted for Former Spouses or Beneficiaries<br />
Rollovers are not permitted for the former spouse or former beneficiary of an <strong>Investment</strong> <strong>Plan</strong> member<br />
who had an account in the <strong>Investment</strong> <strong>Plan</strong> (and removed all of the funds from the account),<br />
established by terms of a Qualified Domestic Relations Order or by the <strong>Investment</strong> <strong>Plan</strong> Beneficiary<br />
Designation Form.<br />
Reference:<br />
Sections 121.4501(5)(c) and (21), F.S.<br />
Section 19-12.007, F.A.C.<br />
RETIREMENT AND FINANCIAL PLANNING<br />
Retirement and financial planning services are available at no cost to all members of the Florida<br />
Retirement System through the My<strong>FRS</strong> Financial Guidance Line. The services are provided through a<br />
contract with Ernst & Young. The Ernst & Young planners can help you develop a full financial plan<br />
using not only your <strong>FRS</strong> benefits, but any other sources of income, including IRA’s, or a 457, 403(b),<br />
or a 401(k) plan. These long term planning services are available after you make an <strong>FRS</strong> retirement<br />
plan choice.<br />
Ernst & Young financial planners do not sell any investment or insurance products. They are there to<br />
serve as your personal retirement and financial advocate; available to answer any retirement and<br />
financial questions you have.<br />
Reference:<br />
Section 121.4501(10), F.S.<br />
Sections 19-13.004(3), (4), (5), (6) and (7), F.A.C.<br />
WHERE SHOULD I GO FOR MORE INFORMATION<br />
<br />
<strong>FRS</strong> Internet Site: The My<strong>FRS</strong>.com web site is your online source of information for managing<br />
your <strong>FRS</strong> <strong>Investment</strong> <strong>Plan</strong> account.<br />
My<strong>FRS</strong> Financial Guidance Line: Toll-free 1-866-446-9377 (TTY: 1-888-429-2160)<br />
o Ernst & Young (Options 1 & 2) and ING representatives (Option 4) are available from 9<br />
a.m. to 8 p.m. Eastern time (8 a.m. to 7 p.m. Central time).<br />
o Division of Retirement (Option 3) staff is available from 8 a.m. to 5 p.m. Eastern time.<br />
o Representatives are available Monday through Friday, except holidays.<br />
By calling this number, you can contact the following:<br />
(1) An Ernst & Young financial planner. These planners are experienced and unbiased and they<br />
do not sell any investment or insurance products. They can provide guidance on the plan<br />
choice process, help with the CHOICE SERVICE and ADVISOR SERVICE, the one-time<br />
Second Election, and retirement and investment planning.<br />
(2) The Division of Retirement — the administrator of the <strong>FRS</strong> Pension <strong>Plan</strong> — can answer<br />
detailed questions about the <strong>FRS</strong> Pension <strong>Plan</strong>, second election buy back costs, and <strong>FRS</strong><br />
Pension <strong>Plan</strong> QDRO’s.<br />
41<br />
The My<strong>FRS</strong> Financial Guidance Program — Use It No Matter Which <strong>Plan</strong> You Choose<br />
Phone: My<strong>FRS</strong> Financial Guidance Line: 1-866-446-9377 (TTY: 1-888-429-2160) •<br />
Online: My<strong>FRS</strong>.com • Retirement and Financial <strong>Plan</strong>ning Workshops offered in some locations
(3) ING 7 , administrator of the <strong>FRS</strong> <strong>Investment</strong> <strong>Plan</strong>. You can call ING to request account<br />
statements and fund performance reports, move money between investment options within<br />
your account, arrange for benefit payments, file your election forms, request forms and<br />
brochures, and for referral to QDRO Administration for answers regarding <strong>FRS</strong> <strong>Investment</strong><br />
<strong>Plan</strong> QDRO’s.<br />
In the month following quarter end, you will receive a personalized statement showing the status of<br />
your <strong>FRS</strong> <strong>Investment</strong> <strong>Plan</strong> account as of that quarter end.<br />
Reference:<br />
Section 121.4501(11), F.S.<br />
Sections 19-13.002 and 13.004, F.A.C.<br />
WHAT IS THE FINANCIAL GUIDANCE AND ADVICE POLICY<br />
When you use either the online CHOICE SERVICE or the ADVISOR ® SERVICE from Financial<br />
Engines you will have the opportunity to review recommendations for the allocation of investment<br />
funds. Financial Engines is authorized to provide these Services to <strong>FRS</strong> members under contract with<br />
the State Board of Administration of Florida (SBA). Financial Engines will discharge each of its duties<br />
under the SBA contract and exercise each of its powers with due care, skill, prudence and diligence<br />
under the circumstances that a prudent expert, acting in a like capacity and familiar with such matters,<br />
would use in the conduct of any enterprise of like character and with like aims. Financial Engines<br />
discharges its duties under the SBA contract solely in the interest of <strong>FRS</strong> members and their<br />
beneficiaries, shall not directly or indirectly receive any benefit from recommendations made under the<br />
SBA contract, and shall disclose to the SBA any investment or economic interest of Financial Engines<br />
that may be enhanced by the recommendations it makes under the SBA contract. With respect to<br />
investment advisory services provided to you by Financial Engines, Financial Engines will also be<br />
bound by fiduciary duties imposed by federal and state securities laws.<br />
It is important for you to understand that the SERVICES are frameworks to be used in your own<br />
retirement planning; they are not a substitute for your own informed judgment or decisions. Moreover,<br />
they provide only some of the resources that could possibly assist you in making your decisions and<br />
may not reflect all of your individual needs and circumstances. You may accept, reject or modify the<br />
recommendations provided by the CHOICE and ADVISOR SERVICES, and you may consult with<br />
other advisors or professionals (at your expense) as you see fit regarding your personal<br />
circumstances.<br />
Before applying any asset allocation presented to you in the SERVICES, you should consider your<br />
other assets, income and investments (including, for example, equity in a home, IRA investments,<br />
savings accounts and interest in other retirement plans) as well as your <strong>FRS</strong> investments and benefits.<br />
As provided in Rule 19-13.004(4)(d), Florida Administrative Code, the use of the terms<br />
“recommended” or “advice”, or forms thereof of these terms, do not constitute the rendering of advice<br />
in the absence of a mutual agreement between the member and the plan that the advice will serve as<br />
a primary basis for the member’s investment decisions with respect to the member’s account assets.<br />
Such mutual agreement is not offered under the <strong>FRS</strong>.<br />
Please note that since past performance is not always an accurate predictor of the future, and reliance<br />
on historical and current data necessarily involves certain inherent limitations, you must understand<br />
7 Effective January 1, 2010, Hewitt Associates will replace ING as the <strong>FRS</strong> <strong>Investment</strong> <strong>Plan</strong> Administrator.<br />
42<br />
The My<strong>FRS</strong> Financial Guidance Program — Use It No Matter Which <strong>Plan</strong> You Choose<br />
Phone: My<strong>FRS</strong> Financial Guidance Line: 1-866-446-9377 (TTY: 1-888-429-2160) •<br />
Online: My<strong>FRS</strong>.com • Retirement and Financial <strong>Plan</strong>ning Workshops offered in some locations
that future performance estimates are only a tool to be used in evaluating your portfolio and not a<br />
substitute for your informed judgment.<br />
Reference:<br />
Section 19-13.004(4), F.A.C.<br />
43<br />
The My<strong>FRS</strong> Financial Guidance Program — Use It No Matter Which <strong>Plan</strong> You Choose<br />
Phone: My<strong>FRS</strong> Financial Guidance Line: 1-866-446-9377 (TTY: 1-888-429-2160) •<br />
Online: My<strong>FRS</strong>.com • Retirement and Financial <strong>Plan</strong>ning Workshops offered in some locations
GLOSSARY<br />
The following terms are defined as used in connection with the <strong>FRS</strong> and in this brochure. In an effort<br />
to make these provisions easy to understand, nontechnical language has been used as much as<br />
possible. Questions of interpretation will be governed by Chapter 121, Florida Statutes, and any<br />
applicable rules of the Florida Administrative Code.<br />
Beneficiary: The joint annuitant or any other person, organization, estate, or trust fund you designate<br />
to receive a retirement benefit that may be payable when you die.<br />
Benefit: Any paymentlump sum or periodicto you, a retiree, or a beneficiary, based partially or<br />
entirely on employer contributions.<br />
Contributions: The percentage of your gross monthly salary that your employer contributes to the<br />
<strong>FRS</strong> <strong>Investment</strong> <strong>Plan</strong> on your behalf.<br />
Creditable service: A member receives one month of service credit for each month in which any<br />
salary is paid for work performed.<br />
Date of participation: The date you become a plan member.<br />
Defined contribution plan: A type of retirement plan as defined under Section 401(a) of the Internal<br />
Revenue Code, which defines the amount of employer contributions which are made for an employee<br />
and that amount is generally related to an employee’s salary.<br />
Division: Division of Retirement within the Florida Department of Management Services.<br />
Eligible employee: An officer or employee, who is a member of or is eligible for membership in the<br />
Florida Retirement System, including renewed membership; participates in or is eligible to participate<br />
in the Senior Management Service Optional Annuity Program or the State Community College<br />
Optional Retirement Program; or terminated Deferred Retirement Option Program (DROP)<br />
participants, or is eligible to participate in (but does not participate in) the State University System<br />
Optional Retirement Program. An eligible employee does not include active DROP participants,<br />
mandatory participants in the State University System Optional Retirement Program, participants in the<br />
Teachers’ Retirement System (TRS), participants in the State and <strong>County</strong> Officers’ and Employees’<br />
Retirement System (SCOERS), or a retiree of the <strong>FRS</strong> Pension <strong>Plan</strong>, <strong>FRS</strong> <strong>Investment</strong> <strong>Plan</strong>, or any<br />
state-administered retirement system who is initially reemployed with an <strong>FRS</strong>-covered employer on or<br />
after July 1, 2010.<br />
Eligible rollovers: A direct plan transfer from an eligible retirement plan to the <strong>FRS</strong> <strong>Investment</strong> <strong>Plan</strong>.<br />
Terminated <strong>FRS</strong> DROP participants can roll over their DROP proceeds into the <strong>FRS</strong> <strong>Investment</strong> <strong>Plan</strong>.<br />
Also, former <strong>FRS</strong> <strong>Investment</strong> <strong>Plan</strong> members (retirees) who terminated <strong>FRS</strong> employment and took a<br />
complete distribution from their <strong>Investment</strong> <strong>Plan</strong> account may roll eligible funds from other qualified<br />
retirement plans back into the <strong>FRS</strong> <strong>Investment</strong> <strong>Plan</strong>. All rollovers can be accessed for distribution by<br />
the participant even if the participant has returned to <strong>FRS</strong>-covered employment.<br />
Employer: Any agency, branch, department, institution, university, institution of higher education, or<br />
board of the state, or any county agency, branch, department, district school board, or special district<br />
of the state, or any city of the state that participates in the Florida Retirement System for the benefit of<br />
44<br />
The My<strong>FRS</strong> Financial Guidance Program — Use It No Matter Which <strong>Plan</strong> You Choose<br />
Phone: My<strong>FRS</strong> Financial Guidance Line: 1-866-446-9377 (TTY: 1-888-429-2160) •<br />
Online: My<strong>FRS</strong>.com • Retirement and Financial <strong>Plan</strong>ning Workshops offered in some locations
certain of its employees, or a charter school or charter technical career center that participates as<br />
provided in s. 121.051(2)(d), F.S.<br />
Fiscal Year: A 12-month period beginning July 1 and ending on June 30.<br />
Health Insurance Subsidy, or HIS: A supplementary benefit paid to help pay the cost of your health<br />
insurance premiums. The HIS amount you receive is based on your length of service. The subsidy is<br />
$5 for each year of creditable service (with a minimum HIS of $30 per month and a maximum HIS of<br />
$150 per month). To be eligible to receive the HIS under the <strong>FRS</strong> <strong>Investment</strong> <strong>Plan</strong>, you must have at<br />
least 6 years of <strong>FRS</strong> service, terminate employment, meet the normal retirement age or service<br />
requirements of the <strong>FRS</strong> Pension <strong>Plan</strong> for your class of membership, and provide proper<br />
documentation certifying that you have health insurance coverage. You must apply for the HIS with<br />
the Division of Retirement. If you die, your spouse at the time of death is entitled to the HIS benefit.<br />
Local agency employer: The board of county commissioners or other legislative governing body of a<br />
county, including that of a consolidated or metropolitan government; a clerk of the circuit court, sheriff,<br />
property appraiser, tax collector, or supervisor of elections, provided such officer is elected or has<br />
been appointed to fill a vacancy in an elective office; a community college board of trustees or district<br />
school board; or the governing body of any city or special district of the state which participates in the<br />
system for the benefit of certain of its employees.<br />
Officer or employee: Any person receiving salary payments for work performed in a regularly<br />
established position and, if employed by a city or special district, employed in a covered position.<br />
<strong>Plan</strong> year: The period of time beginning July 1 and ending on the following June 30, both dates<br />
inclusive, for all State-administered retirement systems.<br />
Public Employee Optional Retirement Program (PEORP): Formal name of the <strong>FRS</strong> <strong>Investment</strong><br />
<strong>Plan</strong>. Available beginning in 2002, the PEORP is an optional defined contribution plan alternative to<br />
the <strong>FRS</strong> Pension <strong>Plan</strong>. If you were actively employed when the PEORP became effective, you had a<br />
90-day education period followed by a 90-day period in which to choose participation in PEORP. If<br />
you are first employed on, or you return to covered employment after the applicable June 1,<br />
September 1, or December 1, 2002 election dates, you have a 6-month period to elect participation in<br />
the PEORP. If you don’t make a selection, you will remain in the defined benefit plan (<strong>FRS</strong> Pension<br />
<strong>Plan</strong>). Current participants in the Deferred Retirement Option Program (DROP); faculty, including<br />
clinical faculty, in a college at a state university that has a faculty practice plan who are mandatory<br />
members of the State University System Optional Retirement Program; and participants in the<br />
Teachers Retirement System or State and <strong>County</strong> Officers and Employees Retirement System are not<br />
eligible to participate in PEORP.<br />
Reemployment: This term means employment after retirement and is generally limited to employment<br />
with employers participating in the <strong>FRS</strong>.<br />
Salary: Regular payment of compensation by an <strong>FRS</strong> employer to an employee for work performed,<br />
including certain overtime payments. Bonus payments and salary supplements made to teachers who<br />
have a valid National Board for Professional Standards certificate, pursuant to s. 1012.72, Florida<br />
Statutes, are not considered compensation. [By law, certain fees and other amounts are not<br />
considered “compensation” under the <strong>FRS</strong>. See s. 121.021(22), Florida Statutes, or see subsection<br />
(15) of Rule 60S-6.001, F.A.C., for details.]<br />
45<br />
The My<strong>FRS</strong> Financial Guidance Program — Use It No Matter Which <strong>Plan</strong> You Choose<br />
Phone: My<strong>FRS</strong> Financial Guidance Line: 1-866-446-9377 (TTY: 1-888-429-2160) •<br />
Online: My<strong>FRS</strong>.com • Retirement and Financial <strong>Plan</strong>ning Workshops offered in some locations
Retiree: Under the <strong>FRS</strong> <strong>Investment</strong> <strong>Plan</strong>, this term means a former member of the <strong>FRS</strong> <strong>Investment</strong><br />
<strong>Plan</strong> who has terminated employment and has taken a distribution of benefits from the plan, except for<br />
a mandatory distribution of a de minimis account balance.<br />
Retirement: Under the <strong>FRS</strong> <strong>Investment</strong> <strong>Plan</strong>, this term means the point at which you are vested, have<br />
terminated all <strong>FRS</strong>-covered employment, and have taken a distribution from the <strong>Plan</strong>.<br />
Special district: An independent special district as defined in s. 189.403(3), Florida Statutes.<br />
State agency: Any agency, branch, department, institution, university, institution of higher education,<br />
or board of the state that participates in the Florida Retirement System.<br />
State board, or board, or the SBA: The State Board of Administration of Florida.<br />
Termination: This refers to the termination of employment, which occurs when you end all<br />
employment with all <strong>FRS</strong> employers. To receive a distribution from the <strong>FRS</strong> <strong>Investment</strong> <strong>Plan</strong>, you<br />
must terminate all <strong>FRS</strong>-covered employment for three calendar months (If you have reached the<br />
normal retirement requirements of the <strong>FRS</strong> Pension <strong>Plan</strong> for your class of membership (i.e., age 62<br />
with 6 years of service or 30 years of service for all classes but Special Risk), you may take a one-time<br />
distribution of up to 10% of your account balance after being terminated for one calendar month).<br />
Your retirement will be cancelled if you are reemployed by any <strong>FRS</strong> employer during the first three<br />
calendar months (one calendar month if they have met the normal retirement requirements of the <strong>FRS</strong><br />
Pension <strong>Plan</strong>) after termination of employment prior to taking a distribution from your <strong>Investment</strong> <strong>Plan</strong><br />
account balance. You are also required to be terminated from all employment with an <strong>FRS</strong> employer<br />
for six calendar months following the month you received your distribution. Your retirement will be<br />
cancelled if you are reemployed by an <strong>FRS</strong> employer within six calendar months of the month you<br />
receive your distribution. A leave of absence is considered a continuation of the employee-employer<br />
relationship, except that a leave of absence without pay due to a disability may constitute termination if<br />
you make application for and are approved for disability retirement. Disability retirees will cancel their<br />
retirement if any employer gainfully reemploys them at any time following their termination date.<br />
Vest, Vested or Vesting: These terms refer to the guarantee of a benefit under the <strong>FRS</strong> <strong>Investment</strong><br />
<strong>Plan</strong> after you work one year for an <strong>FRS</strong> employer and earn creditable service in a regularly<br />
established position with an <strong>FRS</strong> employer participating in the <strong>FRS</strong> <strong>Investment</strong> <strong>Plan</strong>. You will be<br />
vested in the <strong>FRS</strong> <strong>Investment</strong> <strong>Plan</strong> after you complete one year of service.<br />
Year of service or work year: The period of time you are required to work to receive a full year of<br />
creditable service.<br />
46<br />
The My<strong>FRS</strong> Financial Guidance Program — Use It No Matter Which <strong>Plan</strong> You Choose<br />
Phone: My<strong>FRS</strong> Financial Guidance Line: 1-866-446-9377 (TTY: 1-888-429-2160) •<br />
Online: My<strong>FRS</strong>.com • Retirement and Financial <strong>Plan</strong>ning Workshops offered in some locations
INDEX<br />
$6 per quarter, 27<br />
10% distribution, 25<br />
20 percent tax, 27<br />
401(a), 4<br />
404(c), 6<br />
59½, 27<br />
70½, 25<br />
$<br />
1<br />
2<br />
4<br />
5<br />
7<br />
A<br />
Accumulated Benefit Obligation, 11<br />
Acts of God, 11<br />
Actuarial Accrued Liability, 29<br />
administration, 5<br />
administrative fee, 27<br />
ADVISOR SERVICE, 41<br />
annuity payments, 26<br />
assign benefits, 38<br />
beneficiary, 23, 44<br />
benefit, 44<br />
benefit rights, 23<br />
B<br />
C<br />
cancel retirement election, 36<br />
CHOICE SERVICE, 41, 42<br />
complaint procedures, 36<br />
contribution limit, 11<br />
contributions, 44<br />
blended rate, 9<br />
full rate, 9<br />
creditable service, 17, 44<br />
military, 17<br />
purchase, 17<br />
suspension and reinstatement, 17<br />
workers’ compensation, 17<br />
D<br />
data errors, 38<br />
date of participation, 44<br />
de minimis distribution, 26<br />
Death benefits, 33<br />
Deferred Retirement Option Program, 7<br />
defined benefit plan, 4<br />
defined contribution plan, 4, 44<br />
disability benefits, 32<br />
disclaimer, 3<br />
distributions, 25<br />
Division, 44<br />
Division of Retirement, 41<br />
dual employment, 6<br />
educational institution, 28<br />
effective date, 9<br />
Elected Officers’ Class, 10<br />
election window, 9<br />
eligibility requirements, 7<br />
eligible employee, 44<br />
employee, 45<br />
Employee Retirement Income Security Act, 5<br />
employer, 44<br />
employer contributions, 4<br />
employment rights, 38<br />
employment status, 17<br />
enrollment, 9<br />
enrollment period, 9<br />
Ernst & Young, 41<br />
erroneous information, 3<br />
Excessive Fund Trading Policy, 13<br />
E<br />
federal employer identification number, 5<br />
fiduciary responsibility, 5<br />
Financial Engines, 42<br />
Financial Guidance and Advice Policy, 42<br />
financial planning, 41<br />
fiscal year, 45<br />
Florida Legislature, 5<br />
force majeure, 11<br />
forfeit, 8<br />
forfeiture due to crime, 34<br />
<strong>FRS</strong> <strong>Investment</strong> <strong>Plan</strong>, 4<br />
<strong>FRS</strong> Pension <strong>Plan</strong>, 4<br />
F<br />
G<br />
governmental plan, 4, 5<br />
group health insurance plan, 34<br />
47<br />
The My<strong>FRS</strong> Financial Guidance Program — Use It No Matter Which <strong>Plan</strong> You Choose<br />
Phone: My<strong>FRS</strong> Financial Guidance Line: 1-866-446-9377 (TTY: 1-888-429-2160) •<br />
Online: My<strong>FRS</strong>.com • Retirement and Financial <strong>Plan</strong>ning Workshops offered in some locations
H<br />
Hartford Life Insurance Company, 26<br />
health insurance coverage, 27, 34<br />
Health Insurance Subsidy, 33, 45<br />
Heroes Earnings Assistance and Relief Tax (HEART) Act,<br />
17<br />
Hewitt Associates, 5<br />
income deduction orders, 38<br />
income tax levies, 38<br />
ING, 5, 42<br />
Insurance coverage, 34<br />
invalid distribution, 37<br />
investment funds, 13<br />
change, 13<br />
investment management fees, 27<br />
I<br />
L<br />
legal process, 5<br />
legislative change, 4<br />
local agency employer, 45<br />
lump sum leave payments, 30<br />
M<br />
mailing address, 24<br />
membership classifications, 10<br />
membership requirements, 6<br />
My<strong>FRS</strong> Financial Guidance Line, 41<br />
My<strong>FRS</strong>.com, 41<br />
name change, 24<br />
newly hired employee, 18<br />
officer, 45<br />
participant control, 6<br />
Personal Online Advisor , 13<br />
plan, 5<br />
administrator, 5<br />
amendments, 37<br />
documents, 5<br />
effective date, 5<br />
number, 5<br />
termination, 37<br />
Trustees, 5<br />
type, 5<br />
year, 5, 45<br />
present value calculation, 11<br />
proxy, 6<br />
Public Employee Optional Retirement Program, 45<br />
public records law exemption, 39<br />
N<br />
O<br />
P<br />
QDRO, 38<br />
Q<br />
R<br />
reemployed, 18<br />
reemployed retiree, 18<br />
reemployment, 45<br />
reemployment exceptions, 20<br />
Regular Class, 10<br />
regularly established position, 6<br />
rehired employee, 17<br />
renewed member, 18<br />
renewed membership, 19, 21<br />
Required Minimum Distribution, 25<br />
retired employee, 18<br />
retiree, 46<br />
retirement, 46<br />
retirement contributions, 11<br />
Return Accumulated Benefit Obligation, 29<br />
reverse elections, 3<br />
rollovers, 40<br />
DROP, 40<br />
eligible, 44<br />
former <strong>Investment</strong> <strong>Plan</strong> members, 40<br />
former spouses or beneficiaries, 41<br />
qualified plans, 40<br />
S<br />
salary, 45<br />
Second Choice Service, 29<br />
second election, 28<br />
Senior Management Service Class, 10<br />
Social Security number, 39<br />
special district, 46<br />
Special Risk Administrative Support Class, 10<br />
Special Risk Class, 10<br />
stale-dated check, 26<br />
state agency, 46<br />
State and <strong>County</strong> Officers’ and Employees’ Retirement<br />
System, 7<br />
State Board of Administration of Florida, 46<br />
State University System Optional Retirement Program, 7<br />
summary plan description, 3<br />
surplus, 29<br />
Survivor Financial Counseling, 33<br />
suspense account, 8<br />
suspension of benefits, 18<br />
T<br />
taxes, 27<br />
Teachers’ Retirement System, 7<br />
terminated, 25<br />
termination, 46<br />
U<br />
Uniformed Services Employment and Reemployment Act,<br />
17<br />
48<br />
The My<strong>FRS</strong> Financial Guidance Program — Use It No Matter Which <strong>Plan</strong> You Choose<br />
Phone: My<strong>FRS</strong> Financial Guidance Line: 1-866-446-9377 (TTY: 1-888-429-2160) •<br />
Online: My<strong>FRS</strong>.com • Retirement and Financial <strong>Plan</strong>ning Workshops offered in some locations
vesting, 7, 46<br />
voting, 6<br />
V<br />
W<br />
work year, 46<br />
Worker, Retiree, and Employer Recovery Act, 26<br />
49<br />
The My<strong>FRS</strong> Financial Guidance Program — Use It No Matter Which <strong>Plan</strong> You Choose<br />
Phone: My<strong>FRS</strong> Financial Guidance Line: 1-866-446-9377 (TTY: 1-888-429-2160) •<br />
Online: My<strong>FRS</strong>.com • Retirement and Financial <strong>Plan</strong>ning Workshops offered in some locations
50<br />
The My<strong>FRS</strong> Financial Guidance Program — Use It No Matter Which <strong>Plan</strong> You Choose<br />
Phone: My<strong>FRS</strong> Financial Guidance Line: 1-866-446-9377 (TTY: 1-888-429-2160) •<br />
Online: My<strong>FRS</strong>.com • Retirement and Financial <strong>Plan</strong>ning Workshops offered in some locations